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) Pixed manufacturing overhead ($972,000 1,000,000 unite) 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 plastie purchased and used i Humber of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cont 1,180,000 13,570,000 $10,041,800 939,000 Fixed Overhead Spending Variance Fixed Overhead Volume Variance Over- or Underapplied Fixed Overhead $9,671,700 $1,220,700 $964,000 Standard Quantity 12 aquare foot 0.8 hour 0.8 hour Standard Price (Rate) $0.76 per square foot $10.70 per hour $ 1.20 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). Standard Onit Cost $9.12 8.56 0.96 0.90
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) Pixed manufacturing overhead ($972,000 1,000,000 unite) 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 plastie purchased and used i Humber of labor hours worked Direct labor cost Variable overhead cost Fixed overhead cont 1,180,000 13,570,000 $10,041,800 939,000 Fixed Overhead Spending Variance Fixed Overhead Volume Variance Over- or Underapplied Fixed Overhead $9,671,700 $1,220,700 $964,000 Standard Quantity 12 aquare foot 0.8 hour 0.8 hour Standard Price (Rate) $0.76 per square foot $10.70 per hour $ 1.20 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). Standard Onit Cost $9.12 8.56 0.96 0.90
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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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)
Pixed manufacturing overhead ($972,000 1,000,000 unite)
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
Humber of labor hours worked.
Direct labor cost.
Variable overhead cost
Fixed overhead cost
1,100,000
13,570,000
$10,041,800
Fixed Overhead Spending Variance
Fixed Overhead Volume Variance -
Over- or Underapplied Fixed Overhead
939,000
$9,671,700
$1,220,700
$964,000
Standard Quantity
12 aquare foot
0.8 hour
0.8 hour
Standard Price (Kate)
0.76 per square foot
$10.70 per hour
$ 1.20 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 (.e., zero
variance).
Check my wor
Standard Unit
Cost
$9.12
8.56
0.96
0.90
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