2 hy Summrize the varances that yu compured in 1) ahour: unavarable vanance for

Question

2 hy Summrize the varances that yu compured in 1) ahour: unavarable vanance for the ronth (hpu all values as postive amo-nts, Indicate the etlact of each variance by selectingFer faorable, "U for unfavorable, and 'None for no effect ie zero varianca 20.00 points showing the ret owerzl cble o 1. Compute the tollowing variances for June: a Materals price and quantity variances. (indieate the effect of each variance by selecting F for Mi Tay Company minufactures a plastic swimming peel its Weswaod Plant The plant hak be experiencing preblems as showm by its June contribution fermat income staement below faverable, U" fer unfavorable, and "None" for no effeet i.azero variance) Budgeted Actul Sales (15,000 pools) Matcrial price Maeial price varanice Material qusntity variance Variable col of guocak Variable seling expenses 000 7e Labur rate vaiace Total variable expenses 200,000 ciency varnce 250,000 233,710 Fixed expenses 30,00 130,000 ovsheal efciency vwe Marufacturing overhead Seling and adminisraive Nel variance Tetal fixed cp Net operating incom b Labor ane and eficiency vaiances Indicate the effect of each variance by seleg "F for favorable. U for unfavorable, and "None" for no effect lie, zero variancel Cotains direct materias, direct bbor, and variable manutactuning verhead Anot bnn, who ha® Nast been apported gen??? manager of the Westwood Plant h88 been gnen trucsura to gut n unde control Upon eviewing the plant's incune abatemunt, Ma Dun haa conchaded that the major probem ls in the variabie cust of g She hia be provided with t olowng standand cost per swimming poot Labor efficie 3 Pick out the two mest sign ficant rices that you computed in 11) above. IYou may select more Standard Price Standard 5 6.00 than one answer. Single click the box with ? check mark for correct answers and double click to empty the box for the wrong answers. 3.0 pounds 0.8 hours 5200 per pound Direct manerias Direct labor Variable manufactuning overhead 0.4 hours Matmals prie varane Tctal standard cos 12.00 Varizble overhead rate and eficiency Indicate the effect of each varilance None" for no effect ia, zrovaniance) variances. (Do not round your intemediate calculations by selecting F for favorable, U for unfaworable, and c. La2or rate vanance During June the plant produced 15,000 pools and incurred the following costs Vanable cwemeed rate vanance a Purchased 60,000 pounds of materials at a cost of $1.85 per pound b Used 48 200 pounds of materials in production. (Finshed goods and work in process imventonies are nsgnicant and can be ignored c worked 1 1,000 dinect labor-hours a cost cf *?00 per ha r d Incurred varut1? manufacturing ovntwal cast tetaina s 18,29?? ?? the' marth A tolal ef 5.900 machiM- Vanable ?verhead efficiency vanance It is the company's poicy to close all vanances to cost of goods solid on a monthy basis

Explanation / Answer

Workings:

2.

3. Two most significant variances:

Labor rate variance

Material price variance

1a. Material price variance $         9,000 F Material quantity variance $         6,400 U b. Labor rate variance $       11,800 U Labor efficiency variance $         1,200 F c. Variable overhead rate variance $ 590 U Variable overhead efficiency variance $ 300 F

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