Assignment 7.1: Session 7 Comprehensive Problem (Chapter 9) This section has a nine-part comprehensive problem with multiple questions to address. Download the Chapter 9 Comprehensive Problem Template below to complete all parts. You will need your Bergevin and MacQueen book for reference. Redlands Inc. reported standard and actual costs for the product that it manufactures: Item Standard Actual Direct material price $3 per lb. $2 per lb. Direct materials quantity 2 lbs. 4 lbs. Direct labor price $5 $7 Direct labor quantity 3 hours 2 hours Factory overhead cost $2 per machine hour ---- Machine hours per unit 2 machine hours 3 machine hours Number of finished products made 10 12 Number of finished products sold 10 11 Sales per unit $40 $40 * Redlands used machine hours to apply factory overhead costs. The company incurred $90 actual total factory overhead costs to make the 12 products. 1. Standard product cost Item Price Quantity Total Direct materials Direct labor Factory overhead Standard Cost 2. Forecast income statement through gross profit Income Statement: Sales revenue Cost of goods sold Gross profit 3. Direct Materials Variances Actual Price * Actual Quantity Standard Price * Actual Quantity Standard Price * Standard Quantity Direct materials quantity variance: Direct materials price variance: Direct materials total variance:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assignment 7.1: Session 7 Comprehensive Problem (Chapter 9)

This section has a nine-part comprehensive problem with multiple questions to address. Download the Chapter 9 Comprehensive Problem Template below to complete all parts. You will need your Bergevin and MacQueen book for reference.

Redlands Inc. reported standard and actual costs for the product that it manufactures:

Item	Standard	Actual
Direct material price	$3 per lb.	$2 per lb.
Direct materials quantity	2 lbs.	4 lbs.
Direct labor price	$5	$7
Direct labor quantity	3 hours	2 hours
Factory overhead cost	$2 per machine hour	----
Machine hours per unit	2 machine hours	3 machine hours
Number of finished products made	10	12
Number of finished products sold	10	11
Sales per unit	$40	$40

* Redlands used machine hours to apply factory overhead costs. The company incurred $90 actual total factory overhead costs to make the 12 products.

1. Standard product cost

Item	Price	Quantity	Total
Direct materials
Direct labor
Factory overhead
Standard Cost

2. Forecast income statement through gross profit

Income Statement:
Sales revenue
Cost of goods sold
Gross profit

3. Direct Materials Variances

Actual Price * Actual Quantity	Standard Price * Actual Quantity	Standard Price * Standard Quantity

Direct materials quantity variance:
Direct materials price variance:
Direct materials total variance:

4. Direct Labor Variances

Actual Price * Actual Quantity	Standard Price * Actual Quantity	Standard Price * Standard Quantity

Direct labor quantity variance:
Direct labor price variance:
Total direct labor variance:

5. Factory Overhead Variances

Actual Price * Actual Quantity	Standard Price * Actual Quantity	Standard Price * Standard Quantity

Factory overhead quantity variance:
Factory overhead price variance:
Total factory overhead variance:

6. Cost of Goods Manufactured

Direct materials
Direct labor
Factory overhead
Cost of goods manufactured

7. Cost of Goods Sold

Beginning inventory
Cost of goods manufactured (per COGM statement)
Goods available for sale
Ending inventory
Cost of goods sold

8. Income Statement

Sales revenue
Cost of goods sold (per COGS statement)
Gross profit

9. Balance Sheet

Current assets:
Finished goods inventory

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