The income statement shows the net income earned during the year. According to the standard cost accounting, the cost of goods sold is based on standard costs. The difference between revenues and standard cost indicates the gross profit at a standard cost however the adjustment for favorable and unfavorable variance is made to reach the net income. To prepare: The income statement.

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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.

Chapter 26, Problem 16E

To determine

Introduction: The income statement shows the net income earned during the year. According to the standard cost accounting, the cost of goods sold is based on standard costs. The difference between revenues and standard cost indicates the gross profit at a standard cost however the adjustment for favorable and unfavorable variance is made to reach the net income.

To prepare: The income statement.

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Prepare an income statement for management for the month ended January 31, 2020 with the given information: Neo industries uses a standard costing accounting system. During August, it reported the following manufacturing variances. Materials price Labor quantity variance 1,220 variance 840 U Materials quantity variance 760 F Overhead variance 740 U Labor price variance 450 In addition, 8,100 units of product were sold at 7 per unit. Each unit sold had a standard cost of 4. Selling and administrative expenses were 7,890 for the month.

Dunso Company uses a standard cost accounting system. During January, the company reported the following manufacturing variances. Materials price variance $ 1,220 U Labor quantity variance $ 840 U Materials quantity variance 760 F Overhead variance 740 U Labor price variance 450 U In addition, 8,100 units of product were sold at $7 per unit. Each unit sold had a standard cost of $ 4. Selling and administrative expenses were $ 7,890 for the month. Prepare an income statement for management for the month ended January 31, 2017.

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Answer 2

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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.

Chapter 26, Problem 16E

To determine

Introduction: The income statement shows the net income earned during the year. According to the standard cost accounting, the cost of goods sold is based on standard costs. The difference between revenues and standard cost indicates the gross profit at a standard cost however the adjustment for favorable and unfavorable variance is made to reach the net income.

To prepare: The income statement.

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Answer 3

Question

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.

Chapter 26, Problem 16E

To determine

Introduction: The income statement shows the net income earned during the year. According to the standard cost accounting, the cost of goods sold is based on standard costs. The difference between revenues and standard cost indicates the gross profit at a standard cost however the adjustment for favorable and unfavorable variance is made to reach the net income.

To prepare: The income statement.

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Check out a sample textbook solution

See solution

Answer 4

Question

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.

Chapter 26, Problem 16E

To determine