Required: 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.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Income statement with variances
Instructions
Income Statement
Instructions
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.
Required:
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.
Transcribed Image Text:Income statement with variances Instructions Income Statement Instructions 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. Required: 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.
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