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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) Fixed manufacturing overhead ($383,880 + 914,000 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 1,080,000 11,600,000 $ 11,600,000 312,000 $ 3,681,600 $ 800,000 $ 369,000 Required: Calculate Parker Plastic's direct materials price and quantity variances. Direct Material Price Variance Direct Material Quantity Variance Standard Quantity 8 square foot 0.3 hour 0.3 hour Standard Price (Rate) $ 1.02 per square foot $ 11.10 per hour $ 2.60 per hour 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). Standard Unit Cost $8.16 3.33 0.78 0.42

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 ($383,880 + 914,000 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 1,080,000 11,600,000 $ 11,600,000 312,000 $ 3,681,600 $ 800,000 $ 369,000 Required: Calculate Parker Plastic's direct materials price and quantity variances. Direct Material Price Variance Direct Material Quantity Variance Standard Quantity 8 square foot 0.3 hour 0.3 hour Standard Price (Rate) $ 1.02 per square foot $ 11.10 per hour $ 2.60 per hour 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). Standard Unit Cost $8.16 3.33 0.78 0.42

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) Direct labor Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($383,880 + 914,000 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 1,080,000 11,600,000 $ 11,600,000 312,000 $3,681,600 $ 800,000 $ 369,000 Required: Calculate Parker Plastic's direct materials price and quantity variances. Direct Material Price Variance Direct Material Quantity Variance Standard Quantity 8 square foot 0.3 hour 0.3 hour Standard Price (Rate) per square foot per hour per hour $ 1.02 $ 11.10 $ 2.60 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). Standard Unit Cost $ 8.16 3.33 0.78 0.42
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 ($383,880 + 914,000 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 1,080,000 11,600,000 $ 11,600,000 312,000 $3,681,600 $ 800,000 $ 369,000 Required: Calculate Parker Plastic's direct materials price and quantity variances. Direct Material Price Variance Direct Material Quantity Variance Standard Quantity 8 square foot 0.3 hour 0.3 hour Standard Price (Rate) per square foot per hour per hour $ 1.02 $ 11.10 $ 2.60 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). Standard Unit Cost $ 8.16 3.33 0.78 0.42
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