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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 ($519,680 +928,000 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 12,300,000 $ 8,610,000 326,000 $ 3,912,000 $1,240,000 $ 383,000 Standard Quantity 14 square foot 0.25 hour Standard Price (Rate) $ 0.80 per square foot $12.40 per hour 0.25 hour $ 1.60 per hour Required: 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 $ 11.20 3.10 0.40 0.56

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 ($519,680 +928,000 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 12,300,000 $ 8,610,000 326,000 $ 3,912,000 $1,240,000 $ 383,000 Standard Quantity 14 square foot 0.25 hour Standard Price (Rate) $ 0.80 per square foot $12.40 per hour 0.25 hour $ 1.60 per hour Required: 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 $ 11.20 3.10 0.40 0.56

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 30E: Natur-Gro, Inc., manufactures composters. Based on past experience, Natur-Gro has found that its...
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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 ($519,680 +928,000 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 12,300,000 $ 8,610,000 326,000 $ 3,912,000 $1,240,000 $ 383,000 Standard Quantity 14 square foot 0.25 hour Standard Price (Rate) $ 0.80 per square foot $12.40 per hour 0.25 hour $ 1.60 per hour Required: 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 $ 11.20 3.10 0.40 0.56
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: Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($519,680 +928,000 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 12,300,000 $ 8,610,000 326,000 $ 3,912,000 $1,240,000 $ 383,000 Standard Quantity 14 square foot 0.25 hour Standard Price (Rate) $ 0.80 per square foot $12.40 per hour 0.25 hour $ 1.60 per hour Required: 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 $ 11.20 3.10 0.40 0.56
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