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) | 11 | sq ft. | $ | 0.73 | per sq. ft. | $ | 8.03 | |
Direct labor | 0.25 | hr. | $ | 10.40 | per hr. | 2.60 | ||
Variable manufacturing overhead (based on direct labor hours) | 0.25 | hr. | $ | 2.00 | per hr. | 0.50 | ||
Fixed manufacturing overhead $326,880 ÷ 908,000 units) | 0.36 | |||||||
Parker Plastic had the following actual results for the past
year:
Number of units produced and sold | 1,020,000 | |
Number of square feet of plastic used | 11,300,000 | |
Cost of plastic purchased and used | $ | 7,910,000 |
Number of labor hours worked | 306,000 | |
Direct labor cost | $ | 3,335,400 |
Variable overhead cost | $ | 630,000 |
Fixed overhead cost | $ | 363,000 |
Required:
Calculate Parker Plastic’s direct materials price and quantity
variances. (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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