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, 8,100 units of product were sold at $7 per unit. Each unit sold had a standard cost of $4. Selling and administrative expenses were $7,890 for the month.

Prepare an income statement for management for the month ended January 31, 2017.

Materials price variance $1,220 U Labor quantity variance $840 U Materials quantity variance 760 F Overhead variance 740 U Labor price variance 450 U

Explanation / Answer

Income Statement :-

Particulars Amount($) Amount($) Sales (8100*$7) 56700 Less : Cost of Goods Sold (8100*$4) (32400) Gross Profit (At Standard) 24300 Less : Variances :- Material Price Variance 1220 Overhead Variance 740 Labor Quantity Variance 840 Labor Price Variance 450 Material Quantity Variance (760) Total Variance (2490) Gross Profit (Actual) 21810 Less : Selling and Administrative Expenses (7890) Net Income 13920

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