Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $146 per unit. Its standard cost per unit produced is $116 and its selling and administrative expenses totaled $240,500. Forsyth does not have any variable manufacturing overhead costs and it recorded the following variances during the year: Materials price variance $ 7,600 F Materials quantity variance $ 11,300U Labor rate variance $4,600 U Labor efficiency variance $ 5,500 F Fixed overhead budget variance $ 3,600 F Fixed overhead volume variance Required: $ 13,100F I 1. When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much? 2. Prepare an income statement for the year.

Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $146 per unit. Its standard cost per unit produced is $116 and its selling and administrative expenses totaled $240,500. Forsyth does not have any variable manufacturing overhead costs and it recorded the following variances during the year: Materials price variance $ 7,600 F Materials quantity variance $ 11,300U Labor rate variance $4,600 U Labor efficiency variance $ 5,500 F Fixed overhead budget variance $ 3,600 F Fixed overhead volume variance Required: $ 13,100F I 1. When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much? 2. Prepare an income statement for the year.

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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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orsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $154 per unit. Its standard cost per unit produced is $124 and its selling and administrative expenses totaled $244,500. Forsyth does not have any variable manufacturing overhead costs and it recorded the following variances during the year: Materials price variance $ 8,400 F Materials quantity variance $ 12,100 U Labor rate variance $ 5,400 U Labor efficiency variance $ 6,300 F Fixed overhead budget variance $ 4,400 F Fixed overhead volume variance $ 13,900 F 1. When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much? 2. Prepare an income statement for the year.
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