Problem $9-18($Algo$)$ Comprehensive Variance Analysis $[$L$09-4,$ LO$9-5,$ LO$9-6]$

$03$:$24$:$41$

Miller Toy Company manufactures a plastic swimming pool at Its Westwood Plant. The plant has been experlencing problems as shown

by Its June contribution format Income statement below:

${?}^{**}$ Contains direct materlals, direct labor, and varlable 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's Income statement, Ms$.$ Dunn has concluded that the major problem lies in the varlable cost of

goods sold. She has been provided with the following standard cost per swimming pool:

During June the plant produced $4,000$ pools and Incurred the following costs:

a$.$ Purchased $19,800$ pounds of materlals at a cost of $$2\mathrm{.}55$ per pound.

b$.$ Used $14,600$ pounds of materlals in production. $($Finished goods and work in process Inventorles are Insignificant and can be

Ignored.$)$

c$.$ Worked $3,000$ direct labor$-$hours at a cost of $$6\mathrm{.}40$ per hour.

d$.$ Incurred varlable manufacturing overhead cost totaling $$4,940$ for the month. A total of $1,900$ machine$-$hours was recorded.

It is the company's policy to close all varlances to cost of goods sold on a monthly basis.

Requlred:

Compute the following varlances for June:

a$.$ Materlals price and quantity varlances.

b$.$ Labor rate and efficlency varlances.

c$.$ Varlable overhead rate and efficlency varlances.

Summarize the varlances that you computed In $(1)$ above by showing the net overall favorable or unfavorable varlance for the month.