Prepare an income statement for the year ended December 31, through the gross profit for Baxter Company using the following information: Baxter Company sold 9,200 units at $150 per unit. Normal production is 9,600 units. (Do not round fixed overhead rate calculation when determining fixed factory overhead volume variance.) Standard: 5 yards per unit at $6.30 per yard Standard: 2.75 hours per unit at $16.00 Standard: variable overhead $1.05 per unit Standard: fixed overhead $216,000 (budgeted and actual amount) Actual total factory overhead: $237,500 Baxter Company Income Statement Through Gross Profit For the Year Ended December 31 Sales Cost of goods sold - at standard Gross profit - at standard Less variances from standard cost Direct materials price Direct materials quantity Direct labor rate Direct labor time Factory overhead controllable Factory overhead volume Gross profit - actual Favorable Unfavorable $ Actual yards used: 47,020 yards at $6.25 per yard Actual hours worked: 25,050 at $15.90 per hour 00
Prepare an income statement for the year ended December 31, through the gross profit for Baxter Company using the following information: Baxter Company sold 9,200 units at $150 per unit. Normal production is 9,600 units. (Do not round fixed overhead rate calculation when determining fixed factory overhead volume variance.) Standard: 5 yards per unit at $6.30 per yard Standard: 2.75 hours per unit at $16.00 Standard: variable overhead $1.05 per unit Standard: fixed overhead $216,000 (budgeted and actual amount) Actual total factory overhead: $237,500 Baxter Company Income Statement Through Gross Profit For the Year Ended December 31 Sales Cost of goods sold - at standard Gross profit - at standard Less variances from standard cost Direct materials price Direct materials quantity Direct labor rate Direct labor time Factory overhead controllable Factory overhead volume Gross profit - actual Favorable Unfavorable $ Actual yards used: 47,020 yards at $6.25 per yard Actual hours worked: 25,050 at $15.90 per hour 00
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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Transcribed Image Text:Prepare an income statement for the year ended December 31, through the gross profit for Baxter Company using the following information:
Baxter Company sold 9,200 units at $150 per unit. Normal production is 9,600 units. (Do not round fixed overhead rate calculation when determining fixed factory overhead volume variance.)
Standard: 5 yards per unit at $6.30 per yard
Standard: 2.75 hours per unit at $16.00
Standard: variable overhead $1.05 per unit
Standard: fixed overhead $216,000 (budgeted and actual amount)
Baxter Company
Income Statement Through Gross Profit
For the Year Ended December 31
Sales
Cost of goods sold - at standard
Gross profit - at standard.
Less variances from standard cost
Direct materials price
Direct materials quantity
Direct labor rate
Direct labor time
Factory overhead controllable
Factory overhead volume
Gross profit actual
Favorable Unfavorable
$
Actual yards used: 47,020 yards at $6.25 per yard
Actual hours worked: 25,050 at $15.90 per hour
Actual total factory overhead: $237,500
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