Question
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) | 8 | sq ft. | $ | 0.63 | per sq. ft. | $ | 5.04 | |
| Direct labor | 0.26 | hr. | $ | 10.50 | per hr. | 2.73 | ||
| Variable manufacturing overhead (based on direct labor hours) | 0.26 | hr. | $ | 1.50 | per hr. | 0.39 | ||
| Fixed manufacturing overhead $308,040 906,000 units) | 0.34 | |||||||
Parker Plastic had the following actual results for the past year:
| Number of units produced and sold | 1,220,000 | |
| Number of square feet of plastic used | 11,200,000 | |
| Cost of plastic purchased and used | $ | 6,720,000 |
| Number of labor hours worked | 305,000 | |
| Direct labor cost | $ | 3,233,000 |
| Variable overhead cost | $ | 540,000 |
| Fixed overhead cost | $ | 361,000 |
Required: Calculate Parker Plastics direct labor rate and efficiency variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.)
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Cost Accounting A Managerial Emphasis
Authors: Madhav, Charles, Srikant
15th Edition
933254221X, 978-9332542211
