Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Standard Unit Cost Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($308,040 906,000 units) Standard Quantity 8 sq ft. 0.26 hr. 0.26 hr. 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 Standard Price (Rate) $ 0.63 per sq. ft. $10.50 per hr. $ 1.50 per hr. 1,220,000 11,200,000 $ 6,720,000 305,000 $ $ $ 3,233,000 540,000 361,000 sss $5.04 2.73 0.39 0.34

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows:
Standard
Unit
Cost
Direct materials (plastic)
Direct labor
Variable manufacturing overhead
(based on direct labor hours).
Fixed manufacturing overhead
($308,040 + 906,000 units)
Standard
Quantity
8 sq ft.
0.26 hr.
0.26 hr.
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
Standard Price
(Rate)
$ 0.63 per sq. ft.
$10.50 per hr.
$ 1.50 per hr.
Variable Overhead Rate Variance
Variable Overhead Efficiency Variance
Variable Overhead Spending Variance
1,220,000
11,200,000
$ 6,720,000
305,000
$ 3,233,000
$ 540,000
361,000
$
$5.04
2.73
0.39
0.34
Required:
Calculate Parker Plastic's variable overhead rate and efficiency variances and its over- or underapplied variable overhead. (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).)
Transcribed Image Text:Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Standard Unit Cost Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours). Fixed manufacturing overhead ($308,040 + 906,000 units) Standard Quantity 8 sq ft. 0.26 hr. 0.26 hr. 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 Standard Price (Rate) $ 0.63 per sq. ft. $10.50 per hr. $ 1.50 per hr. Variable Overhead Rate Variance Variable Overhead Efficiency Variance Variable Overhead Spending Variance 1,220,000 11,200,000 $ 6,720,000 305,000 $ 3,233,000 $ 540,000 361,000 $ $5.04 2.73 0.39 0.34 Required: Calculate Parker Plastic's variable overhead rate and efficiency variances and its over- or underapplied variable overhead. (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).)
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows:
Standard
Quantity
Standard Price
(Rate)
Standard
Unit Cost
$ 5.04
$ 0.63 per sq. ft.
$10.50 per hr.
2.73
$ 1.50 per hr.
0.39
Direct materials (plastic)
Direct labor
Variable manufacturing overhead
(based on direct labor hours)
Fixed manufacturing overhead
($308,040 906,000 units)
8 sq ft.
0.26 hr.
0.26 hr.
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
Direct Labor Rate Variance
Direct Labor Efficiency Variance
1,220,000
11,200,000
$ 6,720,000
305,000
$
$ 3,233,000
540,000
361,000
$
0.34
Required:
Calculate Parker Plastic's direct labor rate and efficiency variances. (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).)
Transcribed Image Text:Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Standard Quantity Standard Price (Rate) Standard Unit Cost $ 5.04 $ 0.63 per sq. ft. $10.50 per hr. 2.73 $ 1.50 per hr. 0.39 Direct materials (plastic) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($308,040 906,000 units) 8 sq ft. 0.26 hr. 0.26 hr. 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 Direct Labor Rate Variance Direct Labor Efficiency Variance 1,220,000 11,200,000 $ 6,720,000 305,000 $ $ 3,233,000 540,000 361,000 $ 0.34 Required: Calculate Parker Plastic's direct labor rate and efficiency variances. (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).)
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