50.1K

Verified Solution

Link Copied!

Miler Toy Company manufactures a plastic swimming pool at its Westwood Piant. The plant has been experiencing problems as shown by its June contribution format income statement below: "Contains direct materials, direct labor, and vatiable manufacturing overhead Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to "get things under control," Upon reviewing the plant's income statement, Ms. Dunn has concluded that the mojor problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool: 'Based on machine-hours: During June, the plant produced 7,000 pools and incurfed the following costs: a. Purchased 29,500 pounds of materials at a cost of $2.55 per pound b. Used 24,300 pounds of materibls in production. (Finished goods and work in process inventories are insignificant and can be. ignored.) c. Worked 3,400 direct labor-hours at a cost of $7.30 per hour, d. incurred variable manufacturing overhead cost totaling $8.400 for the month. A total of 2.400 machine hours wos recorded. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Compute the following variances for June: o. Materials price and quantity variances. b. Labor rate and efficiency variances. c. Variable overhead rate and efficiency variances. 2. Summarize the variances that you computed in requirement 1 by showing the net overall favorable or unfavorable variance for the month

Answer & Explanation Solved by verified expert

See Answer