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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:

	Flexible Budget		Actual
Sales (6,000 pools)	$	273,000		$	273,000
Variable expenses:
Variable cost of goods sold*		83,460			102,050
Variable selling expenses		24,000			24,000
Total variable expenses		107,460			126,050
Contribution margin		165,540			146,950
Fixed expenses:
Manufacturing overhead		65,000			65,000
Selling and administrative		90,000			90,000
Total fixed expenses		155,000			155,000
Net operating income (loss)	$	10,540		$	(8,050	)

*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:

	Standard Quantity or Hours	Standard Price or Rate			Standard Cost
Direct materials	4.0 pounds	$	2.60	per pound	$	10.40
Direct labor	0.3 hours	$	8.10	per hour		2.43
Variable manufacturing overhead	0.3 hours*	$	3.60	per hour		1.08
Total standard cost per unit					$	13.91

*Based on machine-hours.

During June, the plant produced 6,000 pools and incurred thefollowing costs:

1. Purchased 29,000 pounds of materials at a cost of $3.05 perpound.

2. Used 23,800 pounds of materials in production. (Finished goodsand work in process inventories are insignificant and can beignored.)

3. Worked 2,400 direct labor-hours at a cost of $7.80 per hour.

4. Incurred variable manufacturing overhead cost totaling $8,400for the month. A total of 2,100 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.

b. Labor rate and efficiency variances.

c. Variable overhead rate and efficiency variances.

2. Summarize the variances that you computed in (1) above byshowing the net overall favorable or unfavorable variance for themonth.