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 a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If an amount box does not require an entry leave it blank. Griggs Company Income Statement For the Month Ended December 31 $ $ Unfavorable Favorable Variances from standard cost: $ $ $ Operating expenses: $ Total operating expenses $ Other expense: $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If an amount box does not require an entry leave it blank.

Griggs Company
Income Statement
For the Month Ended December 31
			$

			$
	Unfavorable	Favorable
Variances from standard cost:
	$	$






			$
Operating expenses:
	$

Total operating expenses
			$
Other expense:

			$

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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