, Search E9-9 Calculating Fixed Manufacturing Overhead Spending Volume Variances
ID: 2541149 • Letter: #
Question
, Search E9-9 Calculating Fixed Manufacturing Overhead Spending Volume Variances [LO 9-S1] Parker Plastic, Inc., manulactures plastic mats to use with roling office chairs. Its standard cost information for last year follows Direct materials (plastic) Direct labor Variable manufacturing overhead (based on a4h Quantty Standard Price 12 s 0.67 per sq t 04 hr 804 $ 10.30 per h s 0.80 per hr 4 12 0.32 0.50 direct labor hours) Fixed manufacturing overhead $460.000- 920,000 units) Parker Plastic had the tollowing actual results for the past year Number of units produced aod Number of square feet of plastic used Cost of plastic purchased and used Number of labor hours worked Direct labor Variable overhead cost Fixed overhead cost 1,020,000 11,730,000 7,624.500 403,000 3.989,700 $ 362,700 444,000 Required: Calculate Parker Plastics fixed overhead spending and volume variances and its over. or underappled fixed overhead. (indicate the effect of each variance by selecting - for favorable/Overapplied and "U" for unfavorablelunderapplied) Fixed Overhead Spending Variance Fixed Overhead Volume Variance or Underapplied Fuxed Overhead PrtSen End 8 0Explanation / Answer
Fixed Overhead Spending Variance
($16,000)
= Actual Fixed Overhead - Budgeted Fixed Over Head
= $ 444,000 - $ 460,000
Fied Overhead Volume Varaince
= (Actual Output * Budgeted Fixed Overhead Absorption Rate) - (Budheted Output * Budgeted Fixed Overhead Absorption Rate)
= ( 1,020,000 * $ 0.50) - (920,000 * 0.50)
= $ 510,000 - $ 460,000
CalculationFixed Overhead Spending Variance
($16,000)
= Actual Fixed Overhead - Budgeted Fixed Over Head
= $ 444,000 - $ 460,000
Fied Overhead Volume Varaince
$ 50,000= (Actual Output * Budgeted Fixed Overhead Absorption Rate) - (Budheted Output * Budgeted Fixed Overhead Absorption Rate)
= ( 1,020,000 * $ 0.50) - (920,000 * 0.50)
= $ 510,000 - $ 460,000
Over or (Under) Applied of Fixed Overhead $ 34,000 = $ 50,000 - 16,000Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.