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 ($700,000 + 1,000,000 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 1,100,000 12,650,000 $ 8,728,500 $ Fixed Overhead Spending Variance Fixed Overhead Volume Variance Over- or Underapplied Fixed Overhead 655,000 6,615,500 $ 720,500 $ 688,000 Standard Quantity 12 square foot 0.6 hour 0.6 hour Standard Price (Rate) $ 0.71 per square foot $10.50 per hour $ 1.00 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 Unit Cost $ 8.52 6.30 0.60 0.70
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 ($700,000 + 1,000,000 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 1,100,000 12,650,000 $ 8,728,500 $ Fixed Overhead Spending Variance Fixed Overhead Volume Variance Over- or Underapplied Fixed Overhead 655,000 6,615,500 $ 720,500 $ 688,000 Standard Quantity 12 square foot 0.6 hour 0.6 hour Standard Price (Rate) $ 0.71 per square foot $10.50 per hour $ 1.00 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 Unit Cost $ 8.52 6.30 0.60 0.70
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 76P: Shumaker Company manufactures a line of high-top basketball shoes. At the beginning of the year, the...
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