Easy Roller, Inc., manufactures plastic mats to use with rolling office chairs.

Question

Easy Roller, 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 costs Plastic 12 sq ft. $ 0.75 per sq. ft. $ 9.00 Direct labor .25 hr. 12.00 per hr. 3.00 Variable manufacturing overhead 1.20 per direct labor hour 0.30 Fixed manufacturing overhead ($360,000/900,000 units) 0.40 -------------------------------------------------------------------------------- Easy Roller had the following actual results for the past year. Number of units produced and sold 1,000,000 Number of square feet of plastic used 11,800,000 Cost of plastic purchased and used $ 8,260,000 Number of labor hours worked 245,000 Direct labor cost $ 2,891,000 Variable overhead cost $ 318,500 Fixed overhead cost $ 355,000 -------------------------------------------------------------------------------- Required: Calculate Easy Roller

Explanation / Answer

Please find answer as follows: (11.8 -12)*245000 = 49000 (U) 11.8 is calculated by dividing actual labor cost by actual labor hours,

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