Cost of Goods Sold (at standard) $368,000 Direct Labor Efficiency Variance $15,000 F Sales Revenue (at standard) 520,000 Variable Overhead Efficiency Variance 3,500 U Direct Materials Cost Variance 7,300 U Fixed Overhead Volume Variance 11,500 F Direct Materials Efficiency Variance 2,800 U Selling and Administrative Expenses 74,000 Direct Labor Cost Variance 47,000 U Variable Overhead Cost Variance 1,300 F Fixed Overhead Cost Variance 1,500 F Use the following information to prepare a standard cost income statement forWatsonCompany for 2024. (Use a minus sign or parentheses to enter any contra expenses. Enter all other amounts as positive numbers.) Watson Company Standard Cost Income Statement For the Year Ended December 31, 2024 Sales Revenue Cost of Goods Sold at standard Manufacturing Cost Variances: Direct Materials Cost Variance Direct Materials Efficiency Variance Direct Materials Cost Variance Direct Labor Cost Variance Direct Labor Efficiency Variance Variable Overhead Cost Variance Variable Overhead Efficiency Variance Fixed Overhead Cost Variance Fixed Overhead Volume Variance Total Manufacturing Cost Variances Gross Profit Operating Income

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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Cost of Goods Sold (at standard)	$368,000	Direct Labor Efficiency Variance	$15,000 F
Sales Revenue (at standard)	520,000	Variable Overhead Efficiency Variance	3,500 U
Direct Materials Cost Variance	7,300 U	Fixed Overhead Volume Variance	11,500 F
Direct Materials Efficiency Variance	2,800 U	Selling and Administrative Expenses	74,000
Direct Labor Cost Variance	47,000 U	Variable Overhead Cost Variance	1,300 F
Fixed Overhead Cost Variance	1,500 F

Use the following information to prepare a standard cost income statement forWatsonCompany for

2024.

(Use a minus sign or parentheses to enter any contra expenses. Enter all other amounts as positive numbers.)

Watson Company
Standard Cost Income Statement
For the Year Ended December 31, 2024
Sales Revenue
Cost of Goods Sold at standard
Manufacturing Cost Variances:
	Direct Materials Cost Variance
	Direct Materials Efficiency Variance
	Direct Materials Cost Variance
	Direct Labor Cost Variance
	Direct Labor Efficiency Variance
	Variable Overhead Cost Variance
	Variable Overhead Efficiency Variance
	Fixed Overhead Cost Variance
	Fixed Overhead Volume Variance
Total Manufacturing Cost Variances
Gross Profit

Operating Income

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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