Parker Plastic, Inc., manufactures plastic mats to use with rolling office chair
ID: 2391809 • Letter: P
Question
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows:
Calculate Parker Plastic’s variable overhead rate and efficiency variances and its over- or underapplied variable overhead. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable/Overapplied and "U" for unfavorable/underapplied.)
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows:
Explanation / Answer
variable overhead rate variance = (1.2*245000-318500) = 24500 U
Variable overhead efficiency variance = (1000000*.25-245000)*1.2 = 6000 F
Variable overhead spending variance = (1000000*0.30-318500) = 18500 U