Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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F4

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 ($378,000 900,000 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
Required:
1,000,000
11,800,000
$ 8,260,000
245,000
$ 2,891,000
$ 318,500
$ 355,000
Calculate Parker Plastic's direct materials price and quantity variances.
Standard Quantity
12 square foot
0.25 hour
0.25 hour
Standard Price
$ 0.72 per squa
$ 12.20 per hour
$ 1.20 per 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).
Direct Material Price Variance
Direct Material Quantity Variance
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Transcribed Image Text: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 ($378,000 900,000 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 Required: 1,000,000 11,800,000 $ 8,260,000 245,000 $ 2,891,000 $ 318,500 $ 355,000 Calculate Parker Plastic's direct materials price and quantity variances. Standard Quantity 12 square foot 0.25 hour 0.25 hour Standard Price $ 0.72 per squa $ 12.20 per hour $ 1.20 per 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). Direct Material Price Variance Direct Material Quantity Variance
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