follows: Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($1,197,000 ÷ 1,140,000 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 1,240,000 14,260,000 $ 10,980, 200 1,173,000 $ 12,257,850 $ 1,700,850 $ 1,192,000 Standard Quantity 12 square foot 1.8 hour 1.8 hour Standard Price (Rate) $0.79 per square foot $11.70 per hour $ 1.35 per hour Required: 1., 2., 3., & 4. Prepare the journal entry to record Parker Plastic's direct materials, direct labor, variable overhead, and fixed overhead costs and related variances. Assume the company purchases raw materials as needed and does not maintain any ending inventories. For fixed overhead transactions, assume overhead is applied based on budgeted production. Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Standard Unit Cost $9.48 21.06 2.43 1.05
follows: Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($1,197,000 ÷ 1,140,000 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 1,240,000 14,260,000 $ 10,980, 200 1,173,000 $ 12,257,850 $ 1,700,850 $ 1,192,000 Standard Quantity 12 square foot 1.8 hour 1.8 hour Standard Price (Rate) $0.79 per square foot $11.70 per hour $ 1.35 per hour Required: 1., 2., 3., & 4. Prepare the journal entry to record Parker Plastic's direct materials, direct labor, variable overhead, and fixed overhead costs and related variances. Assume the company purchases raw materials as needed and does not maintain any ending inventories. For fixed overhead transactions, assume overhead is applied based on budgeted production. Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Standard Unit Cost $9.48 21.06 2.43 1.05
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Transcribed Image Text: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 ($1,197,000 ÷ 1,140,000 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
1,240,000
14,260,000
$ 10,980, 200
1,173,000
$ 12,257,850
$ 1,700,850
$ 1,192,000
Standard Quantity
12 square foot
1.8 hour
1.8 hour
Standard Price (Rate)
$ 0.79 per square foot
$11.70 per hour
$ 1.35 per hour
Required:
1., 2., 3., & 4. Prepare the journal entry to record Parker Plastic's direct materials, direct labor, variable overhead, and fixed overhead
costs and related variances. Assume the company purchases raw materials as needed and does not maintain any ending inventories.
For fixed overhead transactions, assume overhead is applied based on budgeted production.
Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.
Standard Unit
Cost
$9.48
21.06
2.43
1.05
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