Parker Plastic, Inc., manufactures plastic mats to use with rolling office chair
ID: 2512601 • Letter: P
Question
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Standard Unit Cost 3.30 0.55 0.62 Quantity Standard Price (Rate) 12 sq ft. $1.10 per sq. ft 13.20 Direct materials (plastic) Direct labor $ 13.20 per hr 0.25 hr o.25 hr Variable manufacturing overhead (based on S 2.20 per hr direct labor hours) Fixed manufacturing overhead $579,080 934,000 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 1,280,000 12,600,000 12,600,000 332,000 $ 4,083,600 $ 1,589,000 $389,000 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.) Direct Material Price Variance Direct Material Quantity VarianceExplanation / Answer
Material price variance = (Standard price-actual price)Actual quantity
= (1.1*12600000-12600000)
Material price variance = 1260000 F
Material quantity variance = (Standard quantity-actual quantity)Standard price
= (1280000*12-12600000)*1.1
Material quantity variance = 3036000 F