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Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost...

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Accounting

Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows:

Standard Quantity Standard Price (Rate) Standard Unit Cost
Direct materials (plastic) 12 sq ft. $ 0.66 per sq. ft. $ 7.92
Direct labor 0.35 hr. $ 10.25 per hr. 3.59
Variable manufacturing overhead (based on direct labor hours) 0.35 hr. $ 0.75 per hr. 0.26
Fixed manufacturing overhead $405,000 900,000 units) 0.45

Parker Plastic had the following actual results for the past year:

Number of units produced and sold 1,000,000
Number of square feet of plastic used 11,500,000
Cost of plastic purchased and used $ 7,360,000
Number of labor hours worked 345,000
Direct labor cost $ 3,398,250
Variable overhead cost $ 293,250
Fixed overhead cost $ 388,000

Required: Calculate Parker Plastics fixed overhead spending and volume variances and its over- or underapplied fixed overhead. (Indicate the effect of each variance by selecting "F" for favorable/Overapplied and "U" for unfavorable/underapplied.)

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