Income Statement Indicating Standard Cost Variances The following data were taken from the records of Griggs Company for December: Administrative expenses $100,800 Cost of goods sold (at standard) 550,000 Direct materials price variance—unfavorable 1,680 Direct materials quantity variance—favorable (560) Direct labor rate variance—favorable (1,120) Direct labor time variance—unfavorable 490 Variable factory overhead controllable variance—favorable (210) Fixed factory overhead volume variance—unfavorable 3,080 Interest expense 2,940 Sales 868,000 Selling expenses 125,000 Prepare an income statement for presentation to management. Enter all amounts as positive numbers. If an amount box does not require an entry leave it blank or enter "0". Griggs Company Income Statement For the Month Ended December 31 Sales $fill in the blank 2 Cost of goods sold-at standard fill in the blank 4 Gross profit-at standard $fill in the blank 6 Favorable Unfavorable Variances from standard cost: Direct materials price $fill in the blank 8 $fill in the blank 9 Direct materials quantity fill in the blank 11 fill in the blank 12 Direct labor rate fill in the blank 14 fill in the blank 15 Direct labor time fill in the blank 17 fill in the blank 18 Variable factory overhead controllable fill in the blank 20 fill in the blank 21 Fixed factory overhead volume fill in the blank 23 fill in the blank 24 Net variance from standard cost-unfavorable fill in the blank 26 Gross profit $fill in the blank 28 Operating expenses: Selling expenses $fill in the blank 30 Administrative expenses fill in the blank 32 fill in the blank 33 Income from operations $fill in the blank 35 Other expense: Interest expense fill in the blank 37 Income before income tax
Income Statement Indicating Standard Cost Variances The following data were taken from the records of Griggs Company for December: Administrative expenses $100,800 Cost of goods sold (at standard) 550,000 Direct materials price variance—unfavorable 1,680 Direct materials quantity variance—favorable (560) Direct labor rate variance—favorable (1,120) Direct labor time variance—unfavorable 490 Variable factory overhead controllable variance—favorable (210) Fixed factory overhead volume variance—unfavorable 3,080 Interest expense 2,940 Sales 868,000 Selling expenses 125,000 Prepare an income statement for presentation to management. Enter all amounts as positive numbers. If an amount box does not require an entry leave it blank or enter "0". Griggs Company Income Statement For the Month Ended December 31 Sales $fill in the blank 2 Cost of goods sold-at standard fill in the blank 4 Gross profit-at standard $fill in the blank 6 Favorable Unfavorable Variances from standard cost: Direct materials price $fill in the blank 8 $fill in the blank 9 Direct materials quantity fill in the blank 11 fill in the blank 12 Direct labor rate fill in the blank 14 fill in the blank 15 Direct labor time fill in the blank 17 fill in the blank 18 Variable factory overhead controllable fill in the blank 20 fill in the blank 21 Fixed factory overhead volume fill in the blank 23 fill in the blank 24 Net variance from standard cost-unfavorable fill in the blank 26 Gross profit $fill in the blank 28 Operating expenses: Selling expenses $fill in the blank 30 Administrative expenses fill in the blank 32 fill in the blank 33 Income from operations $fill in the blank 35 Other expense: Interest expense fill in the blank 37 Income before income tax
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Income Statement Indicating Standard Cost Variances
The following data were taken from the records of Griggs Company for December:
| Administrative expenses | $100,800 |
| Cost of goods sold (at standard) | 550,000 |
| Direct materials price variance—unfavorable | 1,680 |
| Direct materials quantity variance—favorable | (560) |
| Direct labor rate variance—favorable | (1,120) |
| Direct labor time variance—unfavorable | 490 |
| Variable factory |
(210) |
| Fixed factory overhead volume variance—unfavorable | 3,080 |
| Interest expense | 2,940 |
| Sales | 868,000 |
| Selling expenses | 125,000 |
Prepare an income statement for presentation to management. Enter all amounts as positive numbers. If an amount box does not require an entry leave it blank or enter "0".
| Griggs Company | |||
| Income Statement | |||
| For the Month Ended December 31 | |||
| Sales | $fill in the blank 2 | ||
| Cost of goods sold-at standard | fill in the blank 4 | ||
| Gross profit-at standard | $fill in the blank 6 | ||
| Favorable | Unfavorable | ||
| Variances from standard cost: | |||
| Direct materials price | $fill in the blank 8 | $fill in the blank 9 | |
| Direct materials quantity | fill in the blank 11 | fill in the blank 12 | |
| Direct labor rate | fill in the blank 14 | fill in the blank 15 | |
| Direct labor time | fill in the blank 17 | fill in the blank 18 | |
| Variable factory overhead controllable | fill in the blank 20 | fill in the blank 21 | |
| Fixed factory overhead volume | fill in the blank 23 | fill in the blank 24 | |
| Net variance from standard cost-unfavorable | fill in the blank 26 | ||
| Gross profit | $fill in the blank 28 | ||
| Operating expenses: | |||
| Selling expenses | $fill in the blank 30 | ||
| Administrative expenses | fill in the blank 32 | fill in the blank 33 | |
| Income from operations | $fill in the blank 35 | ||
| Other expense: | |||
| Interest expense | fill in the blank 37 | ||
| Income before income tax |
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