Parker Plastic, Inc., manufactures plastic mats to use with rolling office chair
ID: 2514990 • Letter: P
Question
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs Its standard cost information for last year follows Standard 12 sq t 1.45 per sq. ft $17.40 0.3 hr Direct labor Variable manufacturing overhead (based on03h $11.90 per hr 230 per h 3 57 0.69 0.50 direct labor hours) Fixed manufacturing overhead $461,000 922,000 Parker Plastic had the following actual results for the past year Number of units produced and sold 1,160,000 12,000,000 5 16,800,000 320,000 s 3,744,000 S 1,100,000 S 377,000 of square feet of plastic used Cost of plastic purchased and used Number of labor hours worked cost Foxed overhead cost 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.)Explanation / Answer
Direct materials price variance = 16800000-(12000000*1.45)= $600000 F Direct materials quantity variance=1.45*(12000000-1160000*12)= $2784000 F