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 ($639,200 940,000 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 1,020,000 12,900,000 $ 16,770,000 338,000 $ 4,258,800 $ 1,760,000 $ 395,000 Required: Calculate Parker Plastic's direct materials price and quantity variances. Direct Material Price Variance Direct Matenal Quantity Variance Standard Quantity 10 square foot 0.3 hour 0.3 hour Standard Price (Rate) $ 1.40 per square foot $13.70 per hour $1.50 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 $14.00 4.11 0.45 0.68
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 ($639,200 940,000 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 1,020,000 12,900,000 $ 16,770,000 338,000 $ 4,258,800 $ 1,760,000 $ 395,000 Required: Calculate Parker Plastic's direct materials price and quantity variances. Direct Material Price Variance Direct Matenal Quantity Variance Standard Quantity 10 square foot 0.3 hour 0.3 hour Standard Price (Rate) $ 1.40 per square foot $13.70 per hour $1.50 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 $14.00 4.11 0.45 0.68
Chapter1: Financial Statements And Business Decisions
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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)
Fixed manufacturing overhead ($639,200 940,000 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
1,020,000
12,900,000
$ 16,770,000
Direct Material Price Variance
Direct Material Quantity Variance
338,000
$ 4,258,800
$ 1,760,000
$395,000
Standard Quantity
10 square foot
0.3 hour
0.3 hour
Standard Price (Rate).
$ 1.40 per square foot
$13.70 per hour
$ 1.50 per hour
Required:
Calculate Parker Plastic's direct materials price and quantity 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 (i.e., zero variance).
Standard Unit
Cost
$ 14.00
4.11
0.45
0.68
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