The income statement of GMA Company for the years ended December 31, 2020 and 2021 showed the following data. 2020 2021 Net Sales 800,000 924,000 Cost of Sales 480,000 501,600 Gross Margin 320,000 422,400 Operating expenses 180,000 140,000 220,000 202,400 Net income Additional Data: Units sold 80,000 88,000 Unit selling price 10.00 10.50 Unit cost 6.00 5.70
The income statement of GMA Company for the years ended December 31, 2020 and 2021 showed the following data. 2020 2021 Net Sales 800,000 924,000 Cost of Sales 480,000 501,600 Gross Margin 320,000 422,400 Operating expenses 180,000 140,000 220,000 202,400 Net income Additional Data: Units sold 80,000 88,000 Unit selling price 10.00 10.50 Unit cost 6.00 5.70
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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- Price-Quantity variance =
- Cost variance =
- Cost-Quantity variance =
Indicate if its FAVORABLE or UNFAVORABLE.
Format: 11,111 F or 11,111 U
Transcribed Image Text:The income statement of GMA Company for the years
ended
December 31, 2020 and 2021 showed the following data.
2020
2021
Net Sales
800,000
924,000
Cost of Sales
480,000
501,600
Gross Margin
320,000
422,400
Operating expenses
180,000
140,000
220,000
202,400
Net income
Additional Data:
Units sold
80,000
88,000
Unit selling price
10.00
10.50
Unit cost
6.00
5.70
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