Question

In: Accounting

Fisk Company uses a standard cost accounting system. During January, the company reported the following manufacturing...

Fisk Company uses a standard cost accounting system. During January, the company reported the following manufacturing variances.

Materials price variance $1,290 U Labor quantity variance $910 U
Materials quantity variance 730 F Overhead variance 830 U
Labor price variance 440 U


In addition, 8,490 units of product were sold at $9 per unit. Each unit sold had a standard cost of $5. Selling and administrative expenses were $7,580 for the month.

Prepare an income statement for management for the month ended January 31, 2020.

FISK COMPANY
Income Statement
                                                          For the Year Ended January 31, 2020January 31, 2020For the Month Ended January 31, 2020

$

                                                          DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances

                                                          DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances

$

                                                          FavorableUnfavorableNeither favorable nor unfavorable

                                                          FavorableUnfavorableNeither favorable nor unfavorable

                                                          FavorableUnfavorableNeither favorable nor unfavorable

                                                          FavorableUnfavorableNeither favorable nor unfavorable

                                                          FavorableUnfavorableNeither favorable nor unfavorable

                                                          DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances

                                                          FavorableUnfavorableNeither favorable nor unfavorable

                                                          DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances

                                                          DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances

$

Solutions

Expert Solution

Answer:

FISK COMPANY   
Income Statement   
For the Month Ended January 31, 2020   
Sales Revenue          76,410
Cost of goods sold          42,450
Gross Profit (at Standard)          33,960
Variances
Material Price          1,290 Unfavorable
Material Quantity             730 Favorable
Labor Price             440 Unfavorable
Labor Quantity             910 Unfavorable
Overhead             830 Unfavorable
Total Variance            2,740
Gross Profit (Actual)          31,220
Selling and administrative expenses            7,580
Net Income/(Loss)          23,640

Calculation:

To prepare the income statement for the month January 31, 2020, first we need to calculate the sales revenue.

Sales Revenue = 8,490 x 9 = 76,410

Then, we need to calculate the Cost of goods sold = 8,490 x 5 = 42,450

Then, we need to deduct the cost of goods sold from sales to get the gross profit.

Next step, we need to input the varainces and the favorable/unfavorable critera. Then, we need to calculate the total variance.

Total Variance = 1,290 + 440 + 910 + 830 -  730 = 2,740

Next step is to calculate the Gross Profit (Actual), for that we need to deduct the total variance from the gross profit. Then also we need to deduct the Selling and administrative expenses from the Gross Profit (Actual), to get the Net Income/(Loss).

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

West Manufacturing Company uses a standard cost system in its accounting records. The standard costs for...
West Manufacturing Company uses a standard cost system in its accounting records. The standard costs for its one product are as follows:                      Materials                                    8 pounds at $1.00 =   $ 8.00                      Direct labor                              1.2 hours at $14.00 =     16.80                      Variable overhead     1.2 direct-labor hours at $4.00 =       4.80                      Fixed overhead         1.2 direct-labor hours at $6.00 =       7.20                      Total standard cost                                                      $36.80             The standard costs per unit are based on normal capacity of 3,600 direct-labor...
The Rogers Company uses a standard cost accounting system and estimates production for the year to...
The Rogers Company uses a standard cost accounting system and estimates production for the year to be 60,000 units. At this volume, the company's variable overhead costs are $0.50 per direct labor hour. The company's single product has a standard cost of $30.00 per unit. Included in the $30.00 is $13.20 for direct materials (3 yards) and $12.00 of direct labor (2 hours). Production information for the month of March follows: Number of units produced 6,000 Materials purchased (18,500 yards)...
The Wolf Company uses a standard cost accounting system and estimates production for the year to...
The Wolf Company uses a standard cost accounting system and estimates production for the year to be 60,000 units. At this volume, the company's variable overhead costs are $0.50 per direct labor hour. The company's single product has a standard cost of $30.00 per unit. Included in the $30.00 is $13.20 for direct materials (3 yards) and $12.00 of direct labor (2 hours) and $4.80 for overhead. The company's variable overhead costs are $0.50 per direct labor hour. Production information...
Reyes Manufacturing Company uses a job order cost system. At the beginning of January, the company...
Reyes Manufacturing Company uses a job order cost system. At the beginning of January, the company had one job in process (Job 201) and one job completed but not yet sold (Job 200). Job 202 was started during January. Other select account balances follow (ignore any accounts that are not listed). During January, the company had the following transactions: (a) Purchased $60,000 worth of materials on account. (b) Recorded materials issued to production as follows: Job Number Total Cost 201...
Cost Accounting Butrico Manufacturing Corporation uses a standard cost system, records materials price variances when direct...
Cost Accounting Butrico Manufacturing Corporation uses a standard cost system, records materials price variances when direct materials are purchased, and prorates all variances at year-end. Variances associated with direct materials are prorated based on the balances of direct materials in the appropriate accounts, and variances associated with direct labor and manufacturing overhead are prorated to Finished Goods Inventory and to Cost of Goods Sold (CGS) on the basis of the relative direct labor cost in these accounts at year-end. The...
Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order...
Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,000 units of Product B was received. The standard cost of one unit of Product B is as follows. Direct materials 3 pounds at $1.00 per pound $3.00 Direct labor 1.00 hour at $8.00 per hour 8.00 Overhead 2 hours (variable $4.00 per machine hour; fixed $2.50 per machine hour) 13.00 Standard cost per unit $24.00 Normal capacity for the...
Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order...
Jorgensen Corporation uses standard costs with its job order cost accounting system. In January, an order (Job No. 12) for 1,000 units of Product B was received. The standard cost of one unit of Product B is as follows. Direct materials 3 pounds at $1.30 per pound $3.90 Direct labor 1.80 hour at $10.00 per hour 18.00 Overhead 2 hours (variable $4.40 per machine hour; fixed $3.40 per machine hour) 15.60 Standard cost per unit $37.50 Normal capacity for the...
Q 21 A manufacturing company based in Tarkwa uses a standard absorption costing system in accounting...
Q 21 A manufacturing company based in Tarkwa uses a standard absorption costing system in accounting for its production costs. The standard cost of a unit of product is as follows:                                                             Standard Quantity                     Standard price/rate                Standard Cost Direct materials                                       5 kilos                                              6.00                                        30.00 Direct labour                                              20 kilos                                          4.00                                          80.00 Variable production overhead         20 kilos                                            0.20                                                       4.00 Fixed production overhead              20 kilos                                          5.00                                                        100.00 The following data related to period 1: Budgeted output                                                       25,000 units Actual output – produced                                        20,000...
when a manufacturing company uses a standard cost system, an unfavorable variance is a contra expense
when a manufacturing company uses a standard cost system, an unfavorable variance is a contra expense
The following is information related to X Company, a company that uses a standard cost system:...
The following is information related to X Company, a company that uses a standard cost system: Standard cost card for 1 unit of Product A: Direct materials – Raw Material A   (1 kilogram @ $ 20/kg.)           $ 20 Direct materials – Raw Material B   (1 kilogram @$ 10/kg.)         $ 10 Direct labour       (1 hour @ $15/hr.)                                 $ 15 Variable overhead       (1 hour @ $ 5/hr.)                                  $   5 Fixed overhead    (1 hour @ $ 10/hr.)                                       $ 10 Total budgeted fixed...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT