90.2K

Verified Solution

Link Copied!

Problem 9-18 (Algo) Comprehensive Variance Analysis [LO9-4, LO9-5, LO9-6] Miller Toy Company manufactures a plastic swinming 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 manaper of the Westwood Plant, has been given instructions to "get things under control "- Upon revewing the plants income statement, Ms. Dunn has concluded that the major problem lies in the variabie cost of goods sold. She has been provided with the following standard cost per swimming pool During June the plant produced 6.000 pach and incured the tollowing costs: A. Purchased 24,800 pounds of materiak a a cost of $2.75 per pound bonored) c. Worked 4,200 direct laborhiours at a cost of $6,00 per hour. d incurred vatiable manutacturing overhead cost fotaing $7,260 for the manth A total of 3,300 machine hours was recorded It is the companys poucy to close all variances to cost of poods sold on a monthly basis. Required: Required: 1. Commite the follownon variakces for thine In the compiny 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 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 Complete this question by entering your answers in the tabs below. 1a. Compute the following variances for June, materials price and quantity variances. 16. Compute the following variances for June, tabor rate and efficiency variances. 1c. Compute the following variances for June, variable overhead rate and efficiency variances. (Oo not round your intermpdate calculatons. Indicate the effed of each variance by selecting "F" for favorabie, "u" for Purchased 24,800 pounds of materials at a cost of $2.75 per pound. Used 19,600 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 4,200 direct labor-hours at a cost of $6.00 per hour. d. Incurred varlable manufacturing overhead cost totaling $7,260 for the month. A total of 3,300 machine-hours was recorded. tis 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 varances. c. Variable overhead rate and efficiency variances. 2. Summarize the variances that you computed in (t) above by showing the net overall favorable or unfavorable variance for the mon 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 varianco). Input the amount as positive value.)

Answer & Explanation Solved by verified expert

See Answer