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 ($500,040 926,000 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 Pised overhead cost 1,200,000 12,200,000 $7,320,000 324,000 $ 3,855,600 $ 1,300,000 $ 381,000 Required: Calculate Parker Plastic's direct labor rate and efficiency variances. Standard Quantity 13 square foot 0.25 hour 0.25 hour Standard Price (Rate). $0.70 per square foot $ 12.20 per hour $ 1.40 per hour Standard Unit Cost $ 9.10 3.05 0.35 0.54

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Chapter3: Cost Behavior
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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 ($500,040 926,000 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 cont
Variable overhead cost
Fixed overhead cost
1,200,000
12,200,000
$7,320,000
324,000
$ 3,855,600
$ 1,300,000
$ 381,000
Direct Labor Rate Variance
Direct Labor Efficiency Variance
Standard Quantity
13 square foot
0.25 hour
0.25 hour
Required:
Calculate Parker Plastic's direct labor rate and efficiency variances.
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 (ie, zero variance).
U
Standard Price (Rate)
$ 0.70 per square foot
$ 12.20 per hour
$ 1.40 per hour
Standard Unit
Cost
$9.10
3.05
0.35
0.54
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 ($500,040 926,000 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 cont Variable overhead cost Fixed overhead cost 1,200,000 12,200,000 $7,320,000 324,000 $ 3,855,600 $ 1,300,000 $ 381,000 Direct Labor Rate Variance Direct Labor Efficiency Variance Standard Quantity 13 square foot 0.25 hour 0.25 hour Required: Calculate Parker Plastic's direct labor rate and efficiency variances. 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 (ie, zero variance). U Standard Price (Rate) $ 0.70 per square foot $ 12.20 per hour $ 1.40 per hour Standard Unit Cost $9.10 3.05 0.35 0.54
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