Question

Exercise 24-16

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		$870	U
Materials quantity variance		740	F		Overhead variance		840	U
Labor price variance		510	U

In addition, 9,000 units of product were sold at $9 per unit. Each unit sold had a standard cost of $5. Selling and administrative expenses were $7,060 for the month.

Prepare an income statement for management for the month ended January 31, 2020.

FISK COMPANY Income Statement January 31, 2020For the Year Ended January 31, 2020For the Month Ended January 31, 2020
						$
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances
			$	FavorableUnfavorableNeither favorable nor unfavorable
				FavorableUnfavorableNeither favorable nor unfavorable
				FavorableUnfavorableNeither favorable nor unfavorable
				FavorableUnfavorableNeither favorable nor unfavorable
				FavorableUnfavorableNeither favorable nor unfavorable
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances				FavorableUnfavorableNeither favorable nor unfavorable
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances						$

.

Answer 1

Prepare an income statement for management for the month ended January 31, 2020.

FISK COMPANY Income Statement For the Month Ended January 31, 2020
						$
Total revenue (9000*9)						81000
Cost of goods sold						45000
Gross profit (at standard)						36000
Materials price variance			$1220 U
Materials quantity variance			740 F
Labor price variance			510 U
Labor quantity variance			870 U
Overhead variance			840 U
Total Variance						2700 U
Gross profit (at actual)						33300
Selling and administrative expense						7060
Net income						$26240