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E9-9 (Algo) Calculating Direct Labor Variances [LO 9-4] 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 ($364,800 +912,000 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: 1,060,000 11,500,000 $ 10,350,000 310,000 $ 3,565,000 $ 780,000 $ 367,000 Standard Unit Standard Quantity 13 square foot 0.3 hour 0.3 hour Standard Price (Rate) $ 0.93 per square foot $ 10.90 per hour Cost $ 12.09 3.27 $ 2.40 per hour 0.72 0.40 Calculate Parker Plastic's direct labor rate and efficiency variances. 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). Answer is complete but not entirely correct. Direct Labor Rate Variance $ 345,000 F Direct Labor Efficiency Variance $ 2,120,400 F

E9-9 (Algo) Calculating Direct Labor Variances [LO 9-4] 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 ($364,800 +912,000 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: 1,060,000 11,500,000 $ 10,350,000 310,000 $ 3,565,000 $ 780,000 $ 367,000 Standard Unit Standard Quantity 13 square foot 0.3 hour 0.3 hour Standard Price (Rate) $ 0.93 per square foot $ 10.90 per hour Cost $ 12.09 3.27 $ 2.40 per hour 0.72 0.40 Calculate Parker Plastic's direct labor rate and efficiency variances. 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). Answer is complete but not entirely correct. Direct Labor Rate Variance $ 345,000 F Direct Labor Efficiency Variance $ 2,120,400 F

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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E9-9 (Algo) Calculating Direct Labor Variances [LO 9-4] 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 ($364,800 +912,000 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: 1,060,000 11,500,000 $ 10,350,000 310,000 $ 3,565,000 $ 780,000 $ 367,000 Standard Unit Standard Quantity 13 square foot 0.3 hour 0.3 hour Standard Price (Rate) $ 0.93 per square foot $ 10.90 per hour Cost $ 12.09 3.27 $ 2.40 per hour 0.72 0.40 Calculate Parker Plastic's direct labor rate and efficiency variances. 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). Answer is complete but not entirely correct. Direct Labor Rate Variance $ 345,000 F Direct Labor Efficiency Variance $ 2,120,400 F
Transcribed Image Text:E9-9 (Algo) Calculating Direct Labor Variances [LO 9-4] 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 ($364,800 +912,000 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: 1,060,000 11,500,000 $ 10,350,000 310,000 $ 3,565,000 $ 780,000 $ 367,000 Standard Unit Standard Quantity 13 square foot 0.3 hour 0.3 hour Standard Price (Rate) $ 0.93 per square foot $ 10.90 per hour Cost $ 12.09 3.27 $ 2.40 per hour 0.72 0.40 Calculate Parker Plastic's direct labor rate and efficiency variances. 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). Answer is complete but not entirely correct. Direct Labor Rate Variance $ 345,000 F Direct Labor Efficiency Variance $ 2,120,400 F
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