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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:

	Budgeted		Actual
Sales (3,000 pools)	$	225,000	$	225,000
Variable expenses:
Variable cost of goods sold*		44,520		56,975
Variable selling expenses		21,000		21,000
Total variable expenses		65,520		77,975
Contribution margin		159,480		147,025
Fixed expenses:
Manufacturing overhead		62,000		62,000
Selling and administrative		87,000		87,000
Total fixed expenses		149,000		149,000
Net operating income (loss)	$	10,480	$	(1,975)

*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	3.7 pounds	$	2.30 per pound	$	8.51
Direct labor	0.6 hours	$	7.80 per hour		4.68
Variable manufacturing overhead	0.5 hours*	$	3.30 per hour		1.65
Total standard cost				$	14.84

*Based on machine-hours.

During June the plant produced 3,000 pools and incurred the following costs:

a.	Purchased 16,100 pounds of materials at a cost of $2.75 per pound.
b.	Used 10,900 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)
c.	Worked 2,400 direct labor-hours at a cost of $7.50 per hour.
d.	Incurred variable manufacturing overhead cost totaling $6,660 for the month. A total of 1,800 machine-hours was recorded.

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

Required:

2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month. (Input all values as positive amounts. Indicate the effect of each variance by selecting "F"for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).) Summary of variances: Material price variance Material quantity variance Labor rate variance Labor efficiency variance Variable overhead rate variance Variable overhead efficiency variance Net variance 0

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