E9-8 (Algo) Calculating Direct Materials Variances [LO 9-3] 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 ($599,040 936,000 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 1,300,000 12,700,000 $ 13,970,000 Required: Calculate Parker Plastic's direct materials price and quantity variances. Direct Material Price Variance Direct Material Quantity Variance 334,000 $ 4,141,600 $ 1,620,000 $ 391,000 F U Standard Quantity 8 square foot 0.3 hour 0.3 hour 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). 4 Standard Price (Rate). $ 1.20 per square foot $ 13.30 per hour $ 2.40 t per hour Standard Unit Cost $ 9.60 3.99 0.72 0.64

E9-8 (Algo) Calculating Direct Materials Variances [LO 9-3] 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 ($599,040 936,000 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 1,300,000 12,700,000 $ 13,970,000 Required: Calculate Parker Plastic's direct materials price and quantity variances. Direct Material Price Variance Direct Material Quantity Variance 334,000 $ 4,141,600 $ 1,620,000 $ 391,000 F U Standard Quantity 8 square foot 0.3 hour 0.3 hour 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). 4 Standard Price (Rate). $ 1.20 per square foot $ 13.30 per hour $ 2.40 t per hour Standard Unit Cost $ 9.60 3.99 0.72 0.64

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Description: E9-8 (Algo) Calculating Direct Materials Variances [LO 9-3]Parker Plastic, Incorporated, manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year.follows:Direct materials (plastic)Direct laborVariable

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter13: Budgeting And Standard Costs

Section: Chapter Questions

Problem 13.4P: Direct materials and direct labor variance analysis Faucet Industries Inc. manufactures faucets in a...

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