Ayala Corporation accumulates the following data relative to jobs started and fi

Question

Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2014.

Prepare an income statement for management. (Ignore income taxes.)

Need help with the red boxes please!! Thank you!

Compute all of the variances for (1) direct materials and (2) direct labor. (Round answers to 0 decimal places, e.g. 125.) (1) Total materials variance 2850 Unfavorable 159 Unfavorable 126 Unfavorable 590 unfavorab Materials price variance Materials quantity variance (2) Total labor variance 960 Unfavorable 5760 favorable 4800 Favorable Labor price variance rable Labor quantity variance s

Explanation / Answer

We are given standard overheads applied = 193500

Actual overheads , =189500

Total Overhead Variance = Standard overheads - Actual Overheads

= 193500 - 189500,= 4000 F

Cost of Goods sold at Standard

Cost of Raw material = 10000 units x 2.10,= 21000

Cost of Labor = 120000

Overheads applied at standard = 193500

Total Cost of Goods sold = 334500 (at standard)

Gross profit at Standard = Sale - COGS at standard

400000 - 334500 , = 65500

Gross profit actual = Cogs at actual costs

material = 23850 ( Net 2850 U)

Labor = 120960 ( Net 960 U)

Overheads = 189500 ( 4000 F)

Total = 334310 ( 190 F)

Sale - Cogs = 400000 -334310, = 65690 actual

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