Income Statement with Variances Alvarado Company produces a product that requires 3.0 standard pounds per unit at a standard price of $6.00 per pound. The company used 23,900 pounds to produce 8,000 units, which were purchased at $6.20 per pound. Each unit requires 7.5 standard direct labor hours per unit at a standard hourly rate of $22.50 per hour. For the 8,000 units produced, 60,200 hours were needed and employees were paid an hourly rate of $21.95 per hour. The company uses a standard variable overhead cost per unit of $1.45 per direct labor hour. Actual variable factory overhead was $85,900. The company uses a standard fixed overhead cost per unit of $2.00 per direct labor hour at 55,000 hours, which is 100% of normal capacity. Prepare an income statement through gross profit for Alvarado Company for the month ended March 31. Assume Alvarado sold 8,000 units at $250 per unit. For those boxes which you must enter subtractive or negative numbers use a minus sign. If an amount box does not require an entry, leave it blank. Alvarado Company Income Statement Through Gross Profit For the Month Ended March 31 Amount Amount Unfavorable Favorable Line Item Description Sales Cost of goods sold-at standard Gross profit-at standard. Variances from standard cost: 1000 Amount
Income Statement with Variances Alvarado Company produces a product that requires 3.0 standard pounds per unit at a standard price of $6.00 per pound. The company used 23,900 pounds to produce 8,000 units, which were purchased at $6.20 per pound. Each unit requires 7.5 standard direct labor hours per unit at a standard hourly rate of $22.50 per hour. For the 8,000 units produced, 60,200 hours were needed and employees were paid an hourly rate of $21.95 per hour. The company uses a standard variable overhead cost per unit of $1.45 per direct labor hour. Actual variable factory overhead was $85,900. The company uses a standard fixed overhead cost per unit of $2.00 per direct labor hour at 55,000 hours, which is 100% of normal capacity. Prepare an income statement through gross profit for Alvarado Company for the month ended March 31. Assume Alvarado sold 8,000 units at $250 per unit. For those boxes which you must enter subtractive or negative numbers use a minus sign. If an amount box does not require an entry, leave it blank. Alvarado Company Income Statement Through Gross Profit For the Month Ended March 31 Amount Amount Unfavorable Favorable Line Item Description Sales Cost of goods sold-at standard Gross profit-at standard. Variances from standard cost: 1000 Amount
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Income Statement with Variances
Alvarado Company produces a product that requires 3.0 standard pounds per unit at a standard price of $6.00 per pound. The company used 23,900 pounds to produce 8,000
units, which were purchased at $6.20 per pound. Each unit requires 7.5 standard direct labor hours per unit at a standard hourly rate of $22.50 per hour. For the 8,000 units
produced, 60,200 hours were needed and employees were paid an hourly rate of $21.95 per hour. The company uses a standard variable overhead cost per unit of $1.45 per
direct labor hour. Actual variable factory overhead was $85,900. The company uses a standard fixed overhead cost per unit of $2.00 per direct labor hour at 55,000 hours,
which is 100% of normal capacity.
Prepare an income statement through gross profit for Alvarado Company for the month ended March 31. Assume Alvarado sold 8,000 units at $250 per unit. For those boxes in
which you must enter subtractive or negative numbers use a minus sign. If an amount box does not require an entry, leave it blank.
Alvarado Company
Income Statement Through Gross Profit
For the Month Ended March 31
Line Item Description
Sales
Cost of goods sold-at standard
Gross profit-at standard
Variances from standard cost:
Direct materials price
Direct materials quantity
Direct labor rate
Direct labor time
Factory overhead controllable
Factory overhead volume
Net variances from standard cost-favorable
Gross profit
Amount
Unfavorable
Amount
Favorable
Amount
000000
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