E9-10 (Algo) Calculating Variable Overhead Variances [LO 9-5]

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.	$	1.10	per sq. ft.	$	13.20
Direct labor	0.25	hr.	$	13.20	per hr.		3.30
Variable manufacturing overhead (based on direct labor hours)	0.25	hr.	$	2.20	per hr.		0.55
Fixed manufacturing overhead ($579,080 934,000 units)							0.62

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

Number of units produced and sold		1,280,000
Number of square feet of plastic used		12,600,000
Cost of plastic purchased and used	$	12,600,000
Number of labor hours worked		332,000
Direct labor cost	$	4,083,600
Variable overhead cost	$	1,589,000
Fixed overhead cost	$	389,000

Required: Calculate Parker Plastics variable overhead rate and efficiency variances and its over- or underapplied variable overhead. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)