Required Information Case 11-55 Comprehensive Variance Analysis Used to Explain Operational Results; Review of Chapters 10 and 11; Activity-Based Costing; Sales Variances (Appendix B) (LO 11-4, 11-5, 11-7, 11-9) [The following Information applies to the questions displayed below.] Aunt Molly's Old Fashioned Cookies bakes cookies for retail stores. The company's best-selling cookie is chocolate nut supreme, which is marketed as a gourmet cookle and regularly sells for $9.00 per pound. The standard cost per pound of chocolate nut supreme, based on Aunt Molly's normal monthly production of 290,000 pounds, Is as follows: Cost Item Direct materials: Cookie mix Milk chocolate Almonds Direct labor:* Mixing Quantity 10 oz. 5 oz. 1 oz. Standard Unit Cost $ 0.02 per oz. 0.15 per oz. 0.50 per oz. Total Cost $0.20 0.75 0.50 $1.45 1 min. 14.40 per hr. $0.24 Baking 2 min. 18.00 per hr. 0.60 $0.84 Variable overheadt 3 min. 32.40 per direct-labor hr. $1.62 Total standard cost per pound $3.91 *Direct-labor rates Include employee benefits. +Applied on the basis of direct-labor hours. Aunt Molly's management accountant, Karen Blair, prepares monthly budget reports based on these standard costs. April's contribution report, which compares budgeted and actual performance, is shown in the following schedule. Units (in pounds) Revenue Direct labor Direct material Variable overhead Total variable costs Contribution margin Contribution Report for April Static Budget 290,000 $2,610,000 $ 420,500 243,600 469,800 Actual 315,000 $2,803,500 $ 603,500 243,660 591,457 Variance 25,000 F $193,500 F $183,000 U 60 U 121,657 U $304,717 U $1,133,900 $1,438,617 $1,476,100 $1,364,883 $111,217 U Justine Madison, president of the company, is disappointed with the results. Despite a sizable Increase in the number of cookies sold, the product's expected contribution to the overall profitability of the firm decreased. Madison has asked Blair to Identify the reason why the contribution margin decreased. Blair has gathered the following Information to help in her analysis of the decrease. Cost Item Direct materials: Cookie mix Milk chocolate Almonds Usage Report for April Actual Cost Quantity 3,225,000 oz. $ 64,500 1,870,000 oz. 374,000 330,000 oz. 165,000 315,000 min. 75,600 Baking 560,200 min. 168,060 Variable overhead 591,457 Total variable costs $1,438,617 Direct labor: Mixing Case 11-55 Part 1 Required: 1. Prepare a new contribution report for April, in which: The static budget column in the contribution report is replaced with a flexible budget column. The variances in the contribution report are recomputed as the difference between the flexible budget and actual columns. (Do not round your Intermediate calculations. Indicate the effect of each varlance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (l.e., zero varlance). Units (in pounds) Revenue Direct material Direct labor Variable overhead Total variable costs Contribution margin Flexible Budget Actual Variance 315,000 315,000 0 None Unfavorable Unfavorable Favorable Unfavorable Unfavorable Unfavorable Case 11-55 Part 4 4. What is the total varlance between the flexible budget contribution margin and the actual contribution margin in the new report prepared for part (1)? Calculate the total contribution margin variance by computing the following variances. (Assume that all materials are used in the month of purchase.). (Do not round your Intermediate calculations. Indicate the effect of each varlance by selecting "Favorable" or "Unfavorable". Select "None" and enter "O" for no effect (I.e., zero varlance).) a. Direct-material price variance. b. Direct-material quantity variance. c. Direct-labor rate variance. d. Direct-labor efficiency variance. e. Variable-overhead spending variance. f. Variable-overhead efficiency variance. g. Sales-price variance. Total