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Problem 10-15 (Algo) Comprehensive Variance Analysis (L010-1, L010-2, L010-3) Milier Toy Company manufactures a plastic swimming pool of its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format Income statement below: PINI Budget Actual 3250,000 $250,000 Salon 5.000 pools) Variable expenses Variable cost of goods solde Varbla lling expenses Total variable expenses contribution margin Fixed expenses Stanut acturing overhond Selling and administrative Hotel Rixed expenses Mat operating Income (los) 66,760 22.000 B0.760 161.240 81,190 22.000 103, 190 146.010 65,000 65,000 38,000 80,000 1517000 151.000 10,240 (4,190) "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 plant income statement, Ms. Dunn has concluded that the major problem lles in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool: Direct materials Direct labor Variable manufacturing overhead Total standard cost per unit Standard Quantity or 2 pounde 0.2 hours 0.6 hours standard Price or late $2.0 per pound $7.90 per hour $ 3.40 per hour Standard Cont 9.12 3.53 2.04 16.69 "Based on machine-hours During Juno, the plant produced 4,000 pools and incurred the following costs: a. Purchased 20,200 pounds of materials at a cost of $285 per pound 6. Used 15,000 pounds of materials in production (Finished goods and work in process inventories are insignificant and can be Ignored.) c. Worked 3,400 direct labor hours at a cost of $760 per hout Incurred variable manufacturing overhead cost totaling $10.260 for the month. A total of 2.700 machine-hours was recorded It is the company's policy to close all variances to cost of goods sold on a monthly basis Requiredi Compute the following variances for lung: a. Materials price and quantity variances b. Labor rate and efficiency variances Vorlable overhead tate and efficiency variances b. Used 15.000 pounds of motertals in production. (Finished goods and work in process inventories are insignificant and can be Ignored.) c Worked 3.400 direct labor-hours at a cost of $760 per hour. aIncurred variable manufacturing overhead cost totaling $10,260 for the month. A total of 2,700 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 varlonces for June: a. Materials price and quantity variances. 6. Labor rate and efficiency variances c. Variable overhead rate and efficiency variances. 2 Summorize the verlances 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. Required Required 2 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 for favorable for unfavorable, and "None" for no effect (le, zero varianco). Input all amounts as positive values.) Show less Ta Material price varianos Material quantity variance Tb.labor rate variance Labor efficiency variance 1cVariable overhead rate variance Variable overhead efficiency variance Required 2 > EO Quantity or Hours 3.8 pounde 0.7 hours 0.6 hours Standard Price DE RE 52.40 per pound 67.90 per hour 5 3.40 per hour Direct materials Direet Labor Variable manufacturing overhead Total standard cont per unit Standard Cost $ 9.12 5.50 2.04 6 26.69 Based on machine-hours. During June, the plant produced 4,000 pools and incurred the following costs: 8. Purchased 20,200 pounds of materials at a cost of $2.85 per pound. b. Used 15,000 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) c. Worked 3,400 direct labor-hours at a cost of $7.50 per hour. d. Incurred variable manufacturing overhead cost totaling S10,260 for the month. A total of 2,700 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 variances. c. Variable overhead rate and efficiency variances, 2. Summarize the variances that you computed in () above by showing the net overall favorable or unfavorable variance for the month. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 (1) zero variance). Input all amounts as positive values.) Net variance

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