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 Direct materials (plastic) 11 sq ft. $ 0.73 per sq. ft. $ 8.03 Direct labor 0.25 hr. $ 10.40 per hr.   2.60 Variable manufacturing overhead (based on direct labor hours) 0.25 hr. $ 2.00 per hr.   0.50 Fixed manufacturing overhead ($326,880 ÷ 908,000 units)             0.36   Parker Plastic had the following actual results for the past year:         Number of units produced and sold   1,020,000 Number of square feet of plastic used   11,300,000 Cost of plastic purchased and used $ 7,910,000 Number of labor hours worked   306,000 Direct labor cost $ 3,335,400 Variable overhead cost $ 630,000 Fixed overhead cost $ 363,000   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).)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question

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
Direct materials (plastic) 11 sq ft. $ 0.73 per sq. ft. $ 8.03
Direct labor 0.25 hr. $ 10.40 per hr.   2.60
Variable manufacturing overhead (based on direct labor hours) 0.25 hr. $ 2.00 per hr.   0.50
Fixed manufacturing overhead ($326,880 ÷ 908,000 units)             0.36
 


Parker Plastic had the following actual results for the past year:
 

     
Number of units produced and sold   1,020,000
Number of square feet of plastic used   11,300,000
Cost of plastic purchased and used $ 7,910,000
Number of labor hours worked   306,000
Direct labor cost $ 3,335,400
Variable overhead cost $ 630,000
Fixed overhead cost $ 363,000
 


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).)

 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Performance measurements
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.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education