E9-9 (Algo) Calculating Direct Labor Variances [LO 9-4] Parker Plastic, Incorporated, manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($308,040 + 906,000 units) Parker Plastic had the following actual results for the past year: Number of units produced and sold Number of square feet of plastic used Cost of plastic purchased and used Number of labor hours worked Direct labor cost Variable overhead cost rint Fixed overhead cost ferences Required: 1,220,000 11,200,000 $ 6,720,000 305,000 $ 3,233,000 $540,000 $ 361,000 Standard Quantity Standard Price (Rate) 8 square foot 0.26 hour 0.26 hour $ 0.63 per square foot $10.50 per hour $ 1.50 per hour Calculate Parker Plastic's direct labor rate and efficiency variances. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Direct Labor Rate Variance Direct Labor Efficiency Variance Standard Unit Cost $ 5.04 2.73 0.39 0.34
E9-9 (Algo) Calculating Direct Labor Variances [LO 9-4] Parker Plastic, Incorporated, manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($308,040 + 906,000 units) Parker Plastic had the following actual results for the past year: Number of units produced and sold Number of square feet of plastic used Cost of plastic purchased and used Number of labor hours worked Direct labor cost Variable overhead cost rint Fixed overhead cost ferences Required: 1,220,000 11,200,000 $ 6,720,000 305,000 $ 3,233,000 $540,000 $ 361,000 Standard Quantity Standard Price (Rate) 8 square foot 0.26 hour 0.26 hour $ 0.63 per square foot $10.50 per hour $ 1.50 per hour Calculate Parker Plastic's direct labor rate and efficiency variances. Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Direct Labor Rate Variance Direct Labor Efficiency Variance Standard Unit Cost $ 5.04 2.73 0.39 0.34
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
![E9-9 (Algo) Calculating Direct Labor Variances [LO 9-4]
Parker Plastic, Incorporated, manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year
follows:
rint
Direct materials (plastic)
Direct labor
Variable manufacturing overhead (based on direct labor hours)
Fixed manufacturing overhead ($308,040 + 906,000 units)
Parker Plastic had the following actual results for the past year:,
Number of units produced and sold
Number of square feet of plastic used
Cost of plastic purchased and used
Number of labor hours worked
Direct labor cost
Variable overhead cost
Fixed overhead cost
1,220,000
11,200,000
$ 6,720,000
305,000
$ 3,233,000
$ 540,000
$ 361,000
D
ferences
Required:
Standard Quantity
Standard Price (Rate)
Standard Unit
Cost
8 square foot
0.26 hour
0.26 hour
$ 0.63 per square foot
$ 10.50 per hour
$ 5.04
2.73
$ 1.50 per hour
0.39
0.34
Calculate Parker Plastic's direct labor rate and efficiency variances.
Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (i.e., zero variance).
Direct Labor Rate Variance
Direct Labor Efficiency Variance](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8a70939e-bbfe-4a35-bc90-21ccafd62ee8%2F1e867a01-70a2-4e4a-bcd3-cad9d7284341%2Fezqdj5l_processed.jpeg&w=3840&q=75)
Transcribed Image Text:E9-9 (Algo) Calculating Direct Labor Variances [LO 9-4]
Parker Plastic, Incorporated, manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year
follows:
rint
Direct materials (plastic)
Direct labor
Variable manufacturing overhead (based on direct labor hours)
Fixed manufacturing overhead ($308,040 + 906,000 units)
Parker Plastic had the following actual results for the past year:,
Number of units produced and sold
Number of square feet of plastic used
Cost of plastic purchased and used
Number of labor hours worked
Direct labor cost
Variable overhead cost
Fixed overhead cost
1,220,000
11,200,000
$ 6,720,000
305,000
$ 3,233,000
$ 540,000
$ 361,000
D
ferences
Required:
Standard Quantity
Standard Price (Rate)
Standard Unit
Cost
8 square foot
0.26 hour
0.26 hour
$ 0.63 per square foot
$ 10.50 per hour
$ 5.04
2.73
$ 1.50 per hour
0.39
0.34
Calculate Parker Plastic's direct labor rate and efficiency variances.
Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (i.e., zero variance).
Direct Labor Rate Variance
Direct Labor Efficiency Variance
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education