Chapter 23, Problem E23.22E

Preparing a standard cost income statement Learning Objective 6

GP $270,700

The May 2018 revenue and cost information for McDonald Outfitters, Inc follows:

Sales Revenue (at standard)	$ 610,000
Cost of Goods Sold (at standard)	348,000
Direct Materials Cost Variance	1,500 F
Direct Materials Efficiency Variance	6,600 F
Direct Labor Cost Variance	4,200 U
Direct Labor Efficiency Variance	2,700 F
Variable Overhead Cost Variance	2,800 U
Variable Overhead Efficiency Variance	1,100 U
Fixed Overhead Cost Variance	2,300 U
Fixed Overhead Volume Variance	8,300 F

Prepare a standard cost income statement for management through gross profit. Report all standard cost variances for management's use. Has management done a good or poor job of controlling costs? Explain.