Question

Exercise 11-16 Fisk 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 $880 U Materials quantity variance 720 F Overhead variance 730 U Labor price variance 400 U In addition, 8,810 units of product were sold at $9 per unit. Each unit sold had a standard cost of $5. Selling and administrative expenses were $8,190 for the month. Prepare an income statement for management for the month ended January 31, 2020. FISK COMPANY Income Statement $ $ Exercise 11-16 Fisk 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 $880 U Materials quantity variance 720 F Overhead variance 730 U Labor price variance 400 U In addition, 8,810 units of product were sold at $9 per unit. Each unit sold had a standard cost of $5. Selling and administrative expenses were $8,190 for the month. Prepare an income statement for management for the month ended January 31, 2020. FISK COMPANY Income Statement $ $

Answer 1

			Income statement
					$	$
	Sales		(8810*9)			79290
	Less; Cost of goods sold			(8810*5)		44050
	Gross profit (Standard)					35240
	Variances
	Materials price variance				-1220
	Labor quantity variance				-880
	Materials quantity variance				720
	Overhead variance				-730
	Labor price variance				-400	-2510
	Gross profit (Actual)					37750
	Less: Selling and administrative expense					8190
	Net income					29560
	Note:
	Give all favorable variances +ve sign and give all unfavorable variances negative sign
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