Question

Exercise 11-16 Fisk Company uses a standard cost accounting system. During January, the company reported the following manufacturing variances. Materials price variance $1,230 U Labor quantity variance $770 U Materials quantity variance 780 F Overhead variance 700 U Labor price variance 540 U In addition, 8,650 units of product were sold at $8 per unit. Each unit sold had a standard cost of $3. Selling and administrative expenses were $7,040 for the month. Prepare an income statement for management for the month ended January 31, 2020. FISK COMPANY Income Statement $ $ $ Click if you would like to Show Work for this question: Open Show Work

Answer 1

SOLUTION

Income statement-

Particulars	Amount ($)	Amount ($)
Sales (8,650 units *$8)		69,200
Less: Cost of Good Sold (8,650 units *$3)		(25,950)
Gross Profit at standard		43,250
Variances-
Materials price variance	1,230
Materials quantity variance	(780)
Labor price variance	540
Labor Quantity variance	770
Overhead Variance	700
Total Variance		(2,460)
Gross Profit Actual		40,790
Selling and administrative expenses		(7,040)
Net Income		33,750