PROBLEM 10-15 Comprehensive Variance Analysis L010-1, L010-2, LO10-3] Miller Toy

Question

PROBLEM 10-15 Comprehensive Variance Analysis L010-1, L010-2, LO10-3] Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been expcriencing problems as shown by its June contribution format income statement below: Budgeted Actual Salos (15,000 pools) Variable expenses: $450.000 $450.000 Variable cost of goods sold" . 180,000 20,000 200.000 196,290 20,000 216,290 Total variable expenses Contribution margin. . Fixed expenses: 250,000 23710 Manufacturing overhead.. Selling and administrative Total fixed expenses Net operating income 130.000130,000 84.000 214,000214,000 $36,000S 19,710 84,000 Contains direct materials, direct labor, and varlablo manufacturing overheed. 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

Explanation / Answer

Question No 5

Question No 6

Answer is False

Question No 7

Efficiency Variance

(Actual Units Produced * Standared labor Cost)-(Actual Direct labor * Standared labor cost per Hr)

=(15000*4.80)-(11800*6)

Efficiency Variance=1200 Favorable

Question No8

Yes

Labor Rate Variance Actual Labor Hr *(AR-SR) =11800*(7-6) =11800 Unfavorable

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