Question
Parker Plastics Incorporated manufactures plastic mats to use with rolling office chairs. It's standard cost information for last few years follows..........
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10.00 polnts Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: ndard Standard QuantityStandard Price (Rate) Unit Cost 15 sqf 0.90 per sq ft Direct materials (plastic) Direct labor $13.50 0.25 hr$12.60 per hr Variable manufacturing overhead (based on o.25 hr 1.80 per hr direct labor hours) 0.45 Fixed manufacturing overhead $539,400+ 930,000 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 1,240,000 12.400,000 $ 9,920,000 328.000 S 3,968,800 5 1,350,000 $ 385,000
Explanation / Answer
Variable overhead rate variance=1350000-(328000*1.8)= $759600 U Variable overhead efficiency variance=1.8*(328000-1240000*0.25)= $32400 U Variable overhead spending variance=1350000-(1240000*0.25*1.8)= $792000 U