Problem 9-18 Comprehensive Variance Analysis (L09-4, LO9-5, LO9-6] 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 Flexible Budget Actual $ 255.000 5.255,000 Sales (7,000 pools) Variable expenses: Variable cost of goods sold" Variable selling expenses Total variable expenses Contribution margin Fixed expenses Manufacturing overhead Selling and administrative Total fixed expenses Net Operating income (loss) 85,400 15,00 100.400 156.600 104,590 15,000 119,590 135,410 64,000 64,000 79.000 79.000 143.000 143,000 11,600 $ (7,590) $ "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's 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 Standard Cost $ 9.60 2.10 0.50 $ 12.20 Standard Quantity or Standard Price Hours or Rate Direct materials 4.0 pounds $ 2.40 per pound Direct labor 0.3 hours $ 7.00 per hour Variable manufacturing overhead 0.2 hours $ 2.50 per hour Total standard cost per unit Based on machine hours During June the plant produced 7000 pools and incurred the following costs a. Purchased 33,000 pounds of materials at a cost of $285 per pound b. Used 27,800 pounds of materials in production. (Finished goods and work in proces inventories are insignificant and can be Ignored) c. Worked 2.700 direct labor-hours at a cost of $670 per hour. d. Incurred variable manufacturing overhead cost totaling $4,930 for the month. A total of 1700 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