Parker Plastic, Incorporated, manufactures plastic mats to use with rolling office chairs. Its standard cost information for last yearfollows:Direct materials (plastic)Direct laborVariable manufacturing overhead (based on direct labor hours)Fixed manufacturing overhead ($461,000 +922,000 units)Parker Plastic had the following actual results for the past year:Number of units produced and soldNumber of square feet of plastic usedCost of plastic purchased and usedNumber of labor hours workedDirect labor costSVariable overhead costFixed overhead cost1,160,00012,000,000$ 16,800,000320,000$ 3,744,000$ 1,100,000$377,000Standard Quantity12 square foot0.3 hourStandard Price (Rate)$ 1.45 per square foot$ 11.90 per hourStandard UnitCost$ 17.403.570.3 hour$ 2.30per hour0.690.50Required: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" forunfavorable, and "None" for no effect (i.e., zero variance).Direct Material Price VarianceDirect Material Quantity Variance

Direct Material Price Variance – It is the cost or price difference between actual price paid for…

Answered: Parker Plastic, Incorporated,…

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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Heintz Products uses activity-based costing to account for product costs. The plant manager has estimated the following cost drivers and rates. Activity Centers Materials inspection Equipment maintenance Machine setups Packing and shipping Direct materials costs were $552,000 and direct labor costs were $392,000 during November, when the plant finished 7,000 pounds of product, had 20 setups, and ran the machines for 15,000 hours. There were no work-in-process inventories. Beginning Balance Required: Use T-accounts to show the flow of materials, labor, and overhead costs from the four overhead activity centers through Work-in- Process Inventory and out to Finished Goods Inventory. Use the accounts Materials Inventory, Wages Payable, Work-in-Process Inventory, Finished Goods Inventory, and four overhead applied accounts. Ending Balance Beginning Balance Ending Balance Cost Drivers Direct materials cost Machine-hours Number of production runs Pounds of finished output Debit Debit…
Use the following information for the Exercise below. (Algo) Skip to question [The following information applies to the questions displayed below.]Barnes Company reports the following for its product for its first year of operations. Direct materials $ 34 per unit Direct labor $ 24 per unit Variable overhead $ 12 per unit Fixed overhead $ 54,000 per year Variable selling and administrative expenses $ 2 per unit Fixed selling and administrative expenses $ 26,000 per year Exercise 19-4 (Algo) Computing cost per unit at different production levels LO P1, P2 P1. Compute total product cost per unit using absorption costing for the following production levels: (a) 3,000 units, (b) 3,600 units, and (c) 4,500 units. P2. The company sells its product for $140 per unit. Compute contribution margin using variable costing assuming the company (a) produces and sells 3,000 units and (b) produces 3,600 units and sells 3,000 units.
Godiva company has two products, A and B. The company uses activity-based costing to allocate overhead costs of $100,000. Data relating to the company's activity pools for the current year are given below: Cost Pool Total cost in Total Number of Activity Measures Used Cost Pool Product A Product B Total Activity 1 $42,000 100 200 300 Activity 2 $10,000 20 5 25 Activity 3 $48,000 3,000 3,000 6,000 Compute the activity rate (allocation rate) for Activity 2: $500 $2,000 $400 $140
Marvel Parts, Incorporated, manufactures auto accessories including a set of seat covers that can be adjusted to fit most cars. According to its standards, the factory should work 1,015 hours each month to produce 2,030 sets of seat covers. The standard costs associated with this level of production are: Direct materials Direct labor Variable manufacturing overhead (based on direct labor-hours) Direct materials (8,400 yards) Direct labor Variable manufacturing overhead Total $ 59,276 $ 8,120 $ 3,857 1. Materials price vanance 1. Materials quantity variance 2. Labor rate variance 2 Labor efficiency variance 3. Vanable overhead rate variance 3. Variable overhead efficiency variance Per Set of Covers During August, the factory worked 700 direct labor-hours and produced 1,500 sets of covers. The following actual costs were recorded during the month: Total $ 42,000 $ 6,300 $3,150 $ 29.20 4.00 1.90 $ 35.10 Per Set of Covers $28.00 4.20 2.10 $34.30 At standard, each set of covers should…
Cost Behavior SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $539,780 + $1.32X, where X equals number of smokers. Last year, SmokeCity produced 19,700 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? For questions 2-4, Enter the final answers rounded to the nearest dollar. 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year?
Jorgansen Lighting, Incorporated, manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external reports. The company provided the following data: Year 1 Year 2 Year 3 Inventories Beginning (units) 210 160 190 Ending (units) 160 190 230 Variable costing net operating income $ 300,000 $ 269,000 $ 260,000 The company’s fixed manufacturing overhead per unit was constant at $560 for all three years. Required: 1. Calculate each year’s absorption costing net operating income. Note: Enter any losses or deductions as a negative value.
Marj Co. uses a standard cost system and has the following standard variable costs. Direct Materials P6.00 per meter Direct Labor ? Variable Factory Overhead P3.00 per direct labor hour Factory overhead is applied to production based on direct labor hours. During the month of February, 5,000 units were produced and sold to customers. The following are the selected production data for the month: Materials Used Direct Labor Variable FOH Standard Cost Allowed $84,000 $52,500 $21,000 Actual Cost Incurred $75,000 ? $18,000 Materials Quantity Variance $6,000 U Actual Direct Labor Hours 7,500 hours Standard FOH rate per direct labor hour 3.00/hr. Standard Price per Meter 6.00 per meter The difference between the standard and actual cost per unit produced is P0.15 favorable. Requirements: 1. Standard Quantity per Unit 2. Material Price Variance
Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. A. Wood used to produce desks ($125.00 per desk) B. Production labor used to produce desks ($15 per hour) C. Production supervisor salary ($45,000 per year) D. Depreciation on factory equipment ($60,000 per year) E. Selling and administrative expenses ($45,000 per year) F. Rent on corporate office ($44,000 per year) G. Nails, glue, and other materials required to produce desks (varies per desk) H. Utilities expenses for production facility I. Sales staff commission (5% of gross sales)
Marj Co. uses a standard cost system and has the following standard variable costs. Direct Materials P6.00 per meter Direct Labor ? Variable Factory Overhead P3.00 per direct labor hour Factory overhead is applied to production based on direct labor hours. During the month of February, 5,000 units were produced and sold to customers. The following are the selected production data for the month: Materials Used Direct Labor Variable FOH Standard Cost Allowed $84,000 $52,500 $21,000 Actual Cost Incurred $75,000 ? $18,000 Materials Quantity Variance $6,000 U Actual Direct Labor Hours 7,500 hours Standard FOH rate per direct labor hour 3.00/hr. Standard Price per Meter 6.00 per meter The difference between the standard and actual cost per unit produced is P0.15 favorable. Requirements: 1. The standard cost per unit of product. 2. The actual cost per unit of product.
See Clear Company manufactures clear plastic CD cases. It applies variable overhead based on the number of machine hours used. Information regarding See Clear's overhead for the month of December follows: Standard Standard Quantity 0.2 machine hours per $1.00 per machine Standard Rate Unit Cost Variable manufacturing overhead $ 0.20 case hour During December, See Clear had the following actual results: 352,000 $ 74,000 65,000 Number of units produced and sold Actual variable overhead cost Actual machine hours Required: Compute See Clear's variable overhead rate variance, variable overhead efficiency variance, and over- or underapplied variable overhead. (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).) Variable Overhead Rate Variance Variable Overhead Efficiency Variance Variable Overhead Spending Variance
Yy
Bing Industries manufactures and sells a single product. The selling price is $800 per unit. In its first year of operations (Year 1), Bing produces 2,500 units and sells 2,000 units. In Year 2, Bing produces 2,000 units and sells 2,500 units. Bing's manufacturing costs were as follows in each of the two years: Direct materials, per unit Direct labor, per unit Variable manufacturing overhead, per unit Fixed manufacturing overhead, total for year $320 $160 $52 $300,000 Using absorption costing, what is the cost of goods sold in Year 2? Round to the nearest whole dollar amount and do not enter a dollar sign or a decimal point (e.g., enter 89, not $89.00).

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