Baxter Company sold 9,200 units at $145 per unit. Normal production is 9,600 units.Standard: 5 yards per unit at $6.30 per yardStandard: 2.75 hours per unit at $16.00Standard: Variable overhead at $1.05 per unitStandard: Fixed overhead $216,000 (budgeted and actual amount)Actual yards used: 47,020 yards at $6.25 per yardActual hours worked: 25,050 hours at $15.90 per hourActual total factory overhead: $236,500Prepare an income statement that includes variances for the year ending December 31 through gross profit for Baxter Company using theabove information. Enter favorable variances as negative numbers. Do not round fixed overhead rate calculation when determiningfixed factory overhead volume variance.Line Item DescriptionSalesBaxter CompanyIncome Statement Through Gross ProfitFor the Year Ending December 31Cost of goods sold-at standardGross profit-at standardLess variances from standard costDirect materials priceDirect materials quantityDirect labor rateDirect labor timeFactory overhead controllableFactory overhead volumeNet variance from standard cost-unfavorableGross profit-actualUnfavorable FavorableAmountAmount2,351Amount1,334,000920,184413,816

It is prepared by the business organizations to know how much amount of profit i.e. gross profit or…

Answered: Baxter Company sold 9,200 units at $145…

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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