Parker Plastic, Inc , manufactures plastic mats to use with rolling office chairs Its standard cost information for last year follows Standard Quantity Standard Price (Rate) Standard Unit Cost Direct materials (plastic) 12 sq ft $ 0 67 per sq ft $ 8 04 Direct labor 0 4 hr $ 10 30 per hr 4 12 Variable manufacturing overhead (based on direct labor hours) 0 4 hr $ 0 80 per hr 0 32 Fixed manufacturing overhead $460,000 920,000 units) 0 50 Parker Plastic had the following actual results for the past year Number of units produced and sold 1,020,000 Number of square feet of plastic used 11,730,000 Cost of plastic purchased and used $ 7,624,500 Number of labor hours worked 403,000 Direct labor cost $ 3,989,700 Variable overhead cost $ 362,700 Fixed overhead cost $ 444,000 Required Calculate Parker Plastics fixed overhead spending and volume variances and its over or underapplied fixed overhead (Indicate the effect of each variance by selecting F for favorable Overapplied and U for unfavorable underapplied )

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Posted on Sep 12, 2024

Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Standard Quantity Standard Price (Rate)

Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows:

	Standard Quantity		Standard Price (Rate)			Standard Unit Cost
Direct materials (plastic)	12	sq ft.	$	0.67	per sq. ft.	$	8.04
Direct labor	0.4	hr.	$	10.30	per hr.		4.12
Variable manufacturing overhead (based on direct labor hours)	0.4	hr.	$	0.80	per hr.		0.32
Fixed manufacturing overhead $460,000 920,000 units)							0.50

Parker Plastic had the following actual results for the past year:


Number of units produced and sold		1,020,000
Number of square feet of plastic used		11,730,000
Cost of plastic purchased and used	$	7,624,500
Number of labor hours worked		403,000
Direct labor cost	$	3,989,700
Variable overhead cost	$	362,700
Fixed overhead cost	$	444,000

Required: Calculate Parker Plastics fixed overhead spending and volume variances and its over- or underapplied fixed overhead. (Indicate the effect of each variance by selecting "F" for favorable/Overapplied and "U" for unfavorable/underapplied.)