Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shownby its June contribution format income statement below:FlexibleActualSales (15,000 pools)Variable expenses:Budget$675,000 $675,000Variable cost of goods sold*Variable selling expensesTotal variable expensesContribution marginFixed expenses:Manufacturing overheadSelling and administrativeTotal fixed expenses435,00020,000455,000220,000461,89020,000481,890193,110130,00084,000214,000$ 6,000 $(20,890)130,00084,000214,000Net operating income (loss)*Contains direct materials, direct labor, and variable manufacturing overhead.Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to "get things undercontrol." Upon reviewing the plant's income statement, Ms. Dunn has concluded that the major problem lies in the variable cost ofgoods sold. She has been provided with the following standard cost per swimming pool:StandardStandard PriceStandardCostQuantity orHours3.0 pounds0.8 hoursor Rate$ 15.00Direct materialsDirect labor$ 5.00 per pound$16.00 per hour$ 3.00 per hour12.801.20Variable manufacturing overheadTotal standard cost per unit0.4 hours*$29.00 Check my"Based on machine-hours.During June, the plant produced 15,000 pools and incurred the following costs:a. Purchased 60,000 pounds of materials at a cost of $4.95 per pound.b. Used 49,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can beignored.)C. Worked 11,800 direct labor-hours at a cost of $17.00 per hour.d. Incurred variable manufacturing overhead cost totaling $18,290 for the month. A total of 5,900 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 (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 1Required 21a. Compute the following variances for June, materials price and quantity variances.1b. Compute the following variances for June, labor rate and efficiency variances.

Name: Miller Toy Company manufactures a plastic swimming pool at its Westwo
Uploaded: 2024-03-20T06:32:49.000Z
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Description: Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shownby its June contribution format income statement below:FlexibleActualSales (15,000 pools)Variable expenses:Budget$675,000

Variance Analysis - It is the difference between actual cost and standard cost over the particular…

Business

Accounting

During June, the plant produced 15,000 pools and incurred the following costs: a. Purchased 60,000 pounds of materials at a cost of $4.95 per pound. b. Used 49,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) C. Worked 11,800 direct labor-hours at a cost of $17.00 per hour. d. Incurred variable manufacturing overhead cost totaling $18,290 for the month. A total of 5,900 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 (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 1 Required 2

During June, the plant produced 15,000 pools and incurred the following costs: a. Purchased 60,000 pounds of materials at a cost of $4.95 per pound. b. Used 49,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) C. Worked 11,800 direct labor-hours at a cost of $17.00 per hour. d. Incurred variable manufacturing overhead cost totaling $18,290 for the month. A total of 5,900 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 (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 1 Required 2

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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At the beginning of the year, you estimated the following - Production - 75,000 units Raw Material - 270,000 pounds at a cost of $1,026,000 Direct Labor - 187,500 hours at a cost of $4,125,000 Variable Overhead - 135,000 machine hours at a cost of $567,000 Fixed Overhead - $900,000 At the end of year, the actual results were as follows - Production - 73,000 units Raw Material - 265,720 pounds purchased and used at a cost of $1,036,308 Direct Labor - 179,580 hours at a cost of $3,968,718 Variable Overhead - 133,590 machine hours at a cost of $558,406.20 Fixed Overhead - $891,000
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