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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) 12 Standard Quantity 0.1 0.1 Fixed manufacturing overhead ($160,000 + 800,000 units) Parker Plastic had the following actual results for the past year: Standard Price (Rate) square foot hour hour Standard Unit Cost $ 0.61 $10.00 $0.50 per square foot per hour per hour $ 7.32 1.00 0.05 0.20

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) 12 Standard Quantity 0.1 0.1 Fixed manufacturing overhead ($160,000 + 800,000 units) Parker Plastic had the following actual results for the past year: Standard Price (Rate) square foot hour hour Standard Unit Cost $ 0.61 $10.00 $0.50 per square foot per hour per hour $ 7.32 1.00 0.05 0.20

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Parker Plastic, Incorporated, manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Direct materials (plastic) 12 Direct labor Variable manufacturing overhead (based on direct 0.1 labor hours) 10,350,000 $ 6,106,500 Standard Quantity 85,000 $ 816,000 $ 51,000 $ 138,000 Fixed manufacturing overhead ($160,000+800,000 units) Parker Plastic had the following actual results for the past year: Number of units produced and sold 900,000 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 0.1 Standard Price (Rate) square foot hour hour Standard Unit Cost $ 0.61 $10.00 $0.50 per square foot per hour per hour Required: Calculate Parker Plastic's fixed overhead spending and volume variances and its over- or underapplied fixed overhead. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). $ 7.32 1.00 0.05 0.20
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) 12 Direct labor Variable manufacturing overhead (based on direct 0.1 labor hours) 10,350,000 $ 6,106,500 Standard Quantity 85,000 $ 816,000 $ 51,000 $ 138,000 Fixed manufacturing overhead ($160,000+800,000 units) Parker Plastic had the following actual results for the past year: Number of units produced and sold 900,000 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 0.1 Standard Price (Rate) square foot hour hour Standard Unit Cost $ 0.61 $10.00 $0.50 per square foot per hour per hour Required: Calculate Parker Plastic's fixed overhead spending and volume variances and its over- or underapplied fixed overhead. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). $ 7.32 1.00 0.05 0.20
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