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

	Budgeted		Actual
Sales (7,000 pools)	$	255,000	$	255,000
Variable expenses:
Variable cost of goodssold*		85,400		104,590
Variable selling expenses		15,000		15,000
Total variable expenses		100,400		119,590
Contribution margin		154,600		135,410
Fixed expenses:
Manufacturing overhead		64,000		64,000
Selling and administrative		79,000		79,000
Total fixed expenses		143,000		143,000
Net operating income	$	11,600	$	(7,590)

*Contains direct materials, direct labor, and variablemanufacturing overhead.

Janet Dunn, who has just been appointed general manager of theWestwood Plant, has been given instructions to “get things undercontrol.” Upon reviewing the plant’s income statement, Ms. Dunn hasconcluded that the major problem lies in the variable cost of goodssold. She has been provided with the following standard cost perswimming pool:

	StandardQuantity or Hours	Standard Price or Rate		Standard Cost
Direct materials	4.0 pounds	$	2.40 per pound	$	9.60
Direct labor	0.3 hours	$	7.00 per hour		2.10
Variable manufacturingoverhead	0.2 hours*	$	2.50 per hour		0.50
Total standard cost				$	12.20

*Based on machine-hours.

During June the plant produced 7,000 pools and incurred thefollowing costs:

a. Purchased 33,000 pounds of materials at a cost of $2.85 perpound.

b. Used 27,800 pounds of materials in production. (Finishedgoods and work in process inventories are insignificant and can beignored.)

c. Worked 2,700 direct labor-hours at a cost of $6.70 perhour.

d. Incurred variable manufacturing overhead cost totaling $4,930for the month. A total of 1,700 machine-hours was recorded.

It is the company’s policy to close all variances to cost ofgoods sold on a monthly basis.

Required:

1. Compute the following variances for June:

a. Materials price and quantity variances. (Indicate theeffect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zerovariance).)

	Materialprice variance ...... Material quantity variance .....

b. Labor rate and efficiency variances. (Indicate theeffect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zerovariance).)

	Laborrate variance ...... Labor efficiency variance .....

c. Variable overhead rate and efficiency variances. (Donot round your intermediate calculations. Indicate the effect ofeach variance by selecting "F" for favorable, "U" for unfavorable,and "None" for no effect (i.e., zero variance).)

	Variableoverhead rate variance ..... Variable overhead efficiency variance .....

2. Summarize the variances that you computed in (1) above byshowing the net overall favorable or unfavorable variance for themonth. (Input all values as positive amounts. Indicate theeffect of each variance by selecting "F" for favorable, "U" forunfavorable, and "None" for no effect (i.e., zerovariance).)

	Summaryof variances: Materialprice variance Materialquantity variance Laborrate variance Laborefficiency variance Variableoverhead rate variance ...... Variableoverhead efficiency variance Net variance .....