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:

*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:

*Based on machine-hours.

During June, the plant produced 6,000 pools and incurred the following costs:

1. Purchased 28,400 pounds of materials at a cost of $2.75 per pound.

2. Used 23,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

3. Worked 5,400 direct labor-hours at a cost of $6.60 per hour.

4. Incurred variable manufacturing overhead cost totaling $10,920 for the month. A total of 3,900 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.

Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3]

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:

*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:

*Based on machine-hours.

During June, the plant produced 4,000 pools and incurred the following costs:

1. Purchased 17,800 pounds of materials at a cost of $3.15 per pound.

2. Used 12,600 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

3. Worked 3,000 direct labor-hours at a cost of $7.00 per hour.

4. Incurred variable manufacturing overhead cost totaling $7,360 for the month. A total of 2,300 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.

Problem 10-15 Comprehensive Variance Analysis [LO10-1, LO10-2, LO10-3]

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:

*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:

*Based on machine-hours.

During June, the plant produced 4,000 pools and incurred the following costs:

1. Purchased 17,800 pounds of materials at a cost of $3.15 per pound.

2. Used 12,600 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

3. Worked 3,000 direct labor-hours at a cost of $7.00 per hour.

4. Incurred variable manufacturing overhead cost totaling $7,360 for the month. A total of 2,300 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.

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:

*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:

*Based on machine-hours.

During June, the plant produced 15,000 pools and incurred the following costs:

- Purchased 60,000 pounds of materials at a cost of $4.95 per pound.

- Used 49,200 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

- Worked 11,800 direct labor-hours at a cost of $17.00 per hour.

- 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.

5)X Company uses an activity-based costing overhead allocation system. It has identified three activities - Material handling, Product testing, Packaging - and their respective cost drivers - pounds of material, tests, packages. Budgeted activity costs in 2018 were as follows:

The following 2018 cost driver information is available for one of its products, Product A, and for all of its products (including Product A):

How much overhead was allocated to Product A in 2018 [round overhead rate(s) to two decimal places]?

6) The cafeteria at X Company incurred the following costs in September:

The hourly workers wages, food costs, and supplies costs were variable; the supervisor salary and equipment costs were fixed. The cafeteria served 11,100 meals during September. In October, the cafeteria is expected to serve 10,600 meals. Using account analysis with this data, estimate the total cafeteria cost in October [round variable costs per unit to two decimal places]?

7) The cafeteria at X Company has the following cost and activity information for the first five months of 2019:

Using the high-low method with this data, estimate the total cafeteria cost in December, when 10,400 meals are expected to be served [round variable costs per unit to two decimal places].

8) Sales and costs for X Company in 2018 were as follows:

X Company expects sales to increase from 8,750 units in 2018 to 9,550 units in 2019. It also expects direct labor costs per unit to decrease by $1.20 and fixed selling costs to increase by $3,300. What is expected profit in 2019?

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:

*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:

*Based on machine-hours.

During June the plant produced 7,000 pools and incurred the following costs:

1. Purchased 29,500 pounds of materials at a cost of $2.55 per pound.

2. Used 24,300 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

3. Worked 3,400 direct labor-hours at a cost of $7.30 per hour.

4. Incurred variable manufacturing overhead cost totaling $8,400 for the month. A total of 2,400 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.

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:

*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:

*Based on machine-hours.

During June, the plant produced 7,000 pools and incurred the following costs:

Purchased 29,500 pounds of materials at a cost of $2.55 per pound.

Used 24,300 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

Worked 3,400 direct labor-hours at a cost of $7.30 per hour.

Incurred variable manufacturing overhead cost totaling $8,400 for the month. A total of 2,400 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.

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:

*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:

*Based on machine-hours.

During June the plant produced 4,000 pools and incurred the following costs:

1. Purchased 19,800 pounds of materials at a cost of $2.55 per pound.

2. Used 14,600 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

3. Worked 3,000 direct labor-hours at a cost of $6.40 per hour.

4. Incurred variable manufacturing overhead cost totaling $4,940 for the month. A total of 1,900 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.

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 Sales (8,000 pools) $ 265,000 $ 265,000 Variable expenses: Variable cost of goods sold* 88,960 106,490 Variable selling expenses 16,000 16,000 Total variable expenses 104,960 122,490 Contribution margin 160,040 142,510 Fixed expenses: Manufacturing overhead 65,000 65,000 Selling and administrative 80,000 80,000 Total fixed expenses 145,000 145,000 Net operating income (loss) $ 15,040 $ (2,490 ) *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 Direct materials 3.0 pounds $ 2.50 per pound $ 7.50 Direct labor 0.4 hours $ 7.10 per hour 2.84 Variable manufacturing overhead 0.3 hours* $ 2.60 per hour 0.78 Total standard cost per unit $ 11.12 *Based on machine-hours. During June, the plant produced 8,000 pools and incurred the following costs: Purchased 29,000 pounds of materials at a cost of $2.95 per pound. Used 23,800 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) Worked 3,800 direct labor-hours at a cost of $6.80 per hour. Incurred variable manufacturing overhead cost totaling $8,100 for the month. A total of 2,700 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.

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:

*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:

*Based on machine-hours.

During June, the plant produced 8,000 pools and incurred the following costs:

1. Purchased 33,000 pounds of materials at a cost of $2.95 per pound.

2. Used 27,800 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.)

3. Worked 3,800 direct labor-hours at a cost of $6.20 per hour.

4. Incurred variable manufacturing overhead cost totaling $4,560 for the month. A total of 1,900 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.