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

Question

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

In addition, 8,000 units of product were sold at $8 per unit. Each unit sold had a standard cost of $5. Selling and administrative expenses were $8,000 for the month.

Prepare an income statement for management for the month ended January 31, 2014.

FISK COMPANY
Income Statement
For the Month Ended January 31, 2014

Materials price variance $1,200 U Labor quantity variance $750 U Materials quantity variance 800 F Overhead variance 800 U Labor price variance 550 U

Explanation / Answer

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

Labor quantity variance

In addition, 8,000 units of product were sold at $8 per unit. Each unit sold had a standard cost of $5. Selling and administrative expenses were $8,000 for the month.

Prepare an income statement for management for the month ended January 31, 2014.

FISK COMPANY
Income Statement
For the Month Ended January 31, 2014

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

Materials price variance $1,200 U

Labor quantity variance

$750 U Materials quantity variance 800 F Overhead variance 800 U Labor price variance 550 U

In addition, 8,000 units of product were sold at $8 per unit. Each unit sold had a standard cost of $5. Selling and administrative expenses were $8,000 for the month.

Prepare an income statement for management for the month ended January 31, 2014.

FISK COMPANY
Income Statement
For the Month Ended January 31, 2014

Sales (8000 units x$8) $64,000 Less: Cost of Good Sold (8000 units x $5) ($40,000) Gross Profit at standard $24,000 Variances Materials price variance $1,200 Materials quantity variance ($800) Labor price variance $550 Labor Quantity variance $750 Overhead Variance $800 Total Variance (UF) ($2,500) Gross Profit Actual $21,500 Selling and administrative expenses ($8,000) Net Income $13,500

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