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Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below:

	Flexible Budget	Actual
Sales (8,000 pools)	$ 290,000	$ 290,000
Variable expenses:
Variable cost of goods sold*	104,400	124,770
Variable selling expenses	20,000	20,000
Total variable expenses	124,400	144,770
Contribution margin	165,600	145,230
Fixed expenses:
Manufacturing overhead	68,000	68,000
Selling and administrative	86,000	86,000
Total fixed expenses	154,000	154,000
Net operating income (loss)	$ 11,600	$ (8,770)

*Contains direct materials, direct labor, and variable 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 plants income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool:

	Standard Quantity or Hours	Standard Price or Rate		Standard Cost
Direct materials	3.6 pounds	$ 2.20	per pound	$ 7.92
Direct labor	0.5 hours	$ 7.70	per hour	3.85
Variable manufacturing overhead	0.4 hours*	$ 3.20	per hour	1.28
Total standard cost per unit				$ 13.05

*Based on machine-hours.

During June the plant produced 8,000 pools and incurred the following costs:

1. Purchased 33,800 pounds of materials at a cost of $2.65 per pound.

2. Used 28,600 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

3. Worked 4,600 direct labor-hours at a cost of $7.40 per hour.

4. Incurred variable manufacturing overhead cost totaling $12,600 for the month. A total of 3,500 machine-hours was recorded.

It is the companys policy to close all variances to cost of goods sold on a monthly basis.

Required:

1. Compute the following variances for June:

a. 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 (1) above by showing the net overall favorable or unfavorable variance for the month.

Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: 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 major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool: During June the plant produced 8,000 pools and incurred the following costs a. Purchased 33,800 pounds of materials at a cost of $2.65 per pound b. Used 28,600 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 4,600 direct labor-hours at a cost of $7.40 per hour. d Incurred variable manufacturing overhead cost totaling $12,600 for the month. A total of 3,500 machine-hours was 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: a. Materials price and quantity variances. b. Labor rate and efficiency vartances. c. Variable overhead rate and efficiency variances. Complete this question by entering your onswers in the tabs below. 1a. Compute the following variances for June, materials price and quantity variances. 1b. Compute the following variances for June, labor rate and efficiency variances. 1c. Compute the following variances for June, variable overhead rate and efficiency variances. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Input all amounts as positive values.) 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance fo Complete this question by entering your answers in the tabs below. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance), Input the amount as positive value.)

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