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 Standard Quantity 12 square foot 0.3 hour Standard Price (Rate) $ 0.83 per square foot $ 10.50 per hour 17 Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($345,800+ 910,000 units) 0.3 hour $2.20 per hour 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 1,040,000 11,400,000 $ 9,120,000 308,000 $ 3,449,600 $689,000 $ 365,000 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 (i.e., zero variance). Direct Labor Rate Variance Direct Labor Efficiency Variance Standard Unit Cost $ 9.96 3.15 0.66 0.38
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 Standard Quantity 12 square foot 0.3 hour Standard Price (Rate) $ 0.83 per square foot $ 10.50 per hour 17 Variable manufacturing overhead (based on direct labor hours) Fixed manufacturing overhead ($345,800+ 910,000 units) 0.3 hour $2.20 per hour 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 1,040,000 11,400,000 $ 9,120,000 308,000 $ 3,449,600 $689,000 $ 365,000 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 (i.e., zero variance). Direct Labor Rate Variance Direct Labor Efficiency Variance Standard Unit Cost $ 9.96 3.15 0.66 0.38
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
Standard Quantity
12 square foot
0.3 hour
Standard Price (Rate)
$ 0.83 per square foot
$ 10.50 per hour
17
Variable manufacturing overhead (based on direct labor hours)
Fixed manufacturing overhead ($345,800+ 910,000 units)
0.3 hour
$2.20 per hour
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
1,040,000
11,400,000
$ 9,120,000
308,000
$ 3,449,600
$689,000
$ 365,000
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 (i.e., zero variance).
Direct Labor Rate Variance
Direct Labor Efficiency Variance
Standard Unit
Cost
$ 9.96
3.15
0.66
0.38
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