Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 9.B, Problem 1E
Forsyth Company manufactures one product. it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year. the company produced and sold 10.000 units at a price of $135 per unit. Its standard cost per unit produced is $105 and its selling and administrative epenscs totaled $235,000. Forsyth does not 460 have any variable 
Required:
- When Forsyth closes its standard cost variances, the cost of goods sold wil1 increase (decrease) by how much?
- Using Exhibit 9B−5 as a guide, prepare an income statement for the year.
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Standard Cost Flows; Income Statement Preparation
Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $135 per unit. Its standard cost per unit produced is $105 and its selling and administrative expenses totaled $235,000. Forsyth does not have any variable manufacturing over-head costs and it recorded the following variances during the year:
1. When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much?
2. Using Exhibit 10B-5 as a guide, prepare an income statement for the year.
Exhibit 10B-5 Dylan Corporation: Income Statement
Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost
system. During the year, the company produced and sold 10,000 units at a price of $151 per unit. Its standard cost per unit produced is
$121 and its selling and administrative expenses totaled $243,000. Forsyth does not have any variable manufacturing overhead costs
and It recorded the following variances during the year:
Haterials price variance
Materials quantity variance
Labor rate variance
Labor efficiency variance
Fixed overhead budget variance
Fixed overhead volume variance
$ 8,100 F
$11,800 U
$ 5,100 U
$ 6,000 F
$ 4,100 F
$13,600 F
Required:
1. When Forsyth closes its standard cost varlances, the cost of goods sold will increase (decrease) by how much?
2. Prepare an income statement for the year.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
When Forsyth closes its standard cost variances, the cost of goods…
orsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $154 per unit. Its standard cost per unit produced is $124 and its selling and administrative expenses totaled $244,500. Forsyth does not have any variable manufacturing overhead costs and it recorded the following variances during the year:
Materials price variance
$
8,400
F
Materials quantity variance
$
12,100
U
Labor rate variance
$
5,400
U
Labor efficiency variance
$
6,300
F
Fixed overhead budget variance
$
4,400
F
Fixed overhead volume variance
$
13,900
F
1. When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much?
2. Prepare an income statement for the year.
Chapter 9 Solutions
Introduction To Managerial Accounting
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY