10.00 points Parker Plastic, Inc., manufactures plastic mats to use with rolling
ID: 2510440 • Letter: 1
Question
10.00 points Parker Plastic, Inc., manufactures plastic mats to use with rolling ofice chairs. Its standard cost infornation for last year follows S 9.10 305 035 0 54 I3 sqft $ 070per sq. ft. 025 hr1220 per hr Direct materials (plastic) Direct labor Variable manufacturing overhead (based on 025 hr140 per hr Fixed manufacturing overhead $500,040RO direct labor hours) 926,000 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 Foed overhead cost 1,200,000 12,200,000 S 7,320,000 324.000 S 3,855,600 S1300,000 381,000 Required: Calculate Parker Plastic's vaniable overhead rate and emciency variances and ts over or underapplied vanable overhead (Do not round intermediate calculations. Indicate and "U" for Unfavorable/Underapplied.J Variable Overhead Rate Variance 845,640 U Vaiable Overhead Efficiency Variance $ 33,600 Variable Overhead Spending VarianceExplanation / Answer
a. Material Price Variance = Actual Quantity ( Standard Price - Actual Price) = 12,200,000* 0.70 - 7,320,000= $8,540,000 - 7,320,000 = $1,220,000
b. Material Quantity Variance = Standard rate(Standard Quantity - Actual Quantity)
1 unit 13 sq ft
1200000 units = 13* 1200000 = 15,600,000 sq. ft
Quantity Variance = 0.70 * (15,600,000 - 12,200,000) = 3400,000.
Variable Overhead spending Variance = (Standard Variable Overhead rate * Actual units of Allocation base)- Actual Variable Overhead cost
Variable Overhead spending Variance = (1.40 * 324000) - 1300000 = 453600 - 1300000 = -$846,400
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.