Question

Parker Plastic, Inc., 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 ($1,120,000 + 1,120,899 units) Standard Quantity 12 sq ft. 0.9 hr. 0.9 hr. Standard Standard Price (Rate) Unit Cost $ 0.78 per sq. ft. $ 9.36 $10.80 per hr. 9.72 $ 1.30 per hr. 1.17 1.00 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 1,220,000 14,830,000 $ 10,662,800 1,093,000 $ 11,367,280 $ 1,530, 200 $ 1,114,080 Required: Calculate Parker Plastic's fixed overhead spending and volume variances and its over- or underapplied fixed overhead. (Indica effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) < Prey 5 of 7 Next > arch во е або

Answer 1

Actual fixed overhead cost = 1,114,000

budgeted fixed overhead cost = 1,120,000

Actual volume = 1,220,000 units

budgeted volume = 1,120,000 units

Fixed overhead spending variance = Budgeted fixed overhead - actual fixed overhead

=1,120,000-1,114,000

=6000 F

FIXED OVERHEAD VOLUME VARIANCE = Fixed overhead rate * (Actual - budgeted volume)

=$1 * (1,220,000-1,120,000)

=100000$ Favorable

applied overhead = FOH *Actual units

=1*1,220,000

=1,220,000$

(overapplied) under applied OH = actual fixed overhead - applied Overhead

=1,114,000-1,220,000

=106000 F over applied(as higher fixed overhead is applied than actual cost]

Answers

FOH spending variance	6000 F
FOH volume variance	100000F
Overapplied Fixed overhead	106000F