Income Statement Indicating Standard Cost Variances The following data were taken from the records Arseneault Company for December: Administrative expenses $114,100 Cost of goods sold (at standard) 634,000 Direct materials price variance-unfavorable 1,830 Direct materials quantity variance-favorable (720) Direct labor rate variance-favorable (1,240) Direct labor time variance-unfavorable 490 Variable factory overhead controllable variance-favorable (250) Fixed factory overhead volume variance-unfavorable 4,190 Interest expense 3,150 Sales 996,000 Selling expenses 136,500 Prepare an income statement for presentation to management. Enter all amounts as positive numbers except favorable variances. Use a minus sign to indicate favorable variances. If an amount box does not require an entry field, leave it blank. Arseneault Company Income Statement For the Month Ended December 31 Unfavorable Favorable Variance adjustments to gross profit at standard: Operating expenses: Other expense:
Income Statement Indicating Standard Cost Variances The following data were taken from the records Arseneault Company for December: Administrative expenses $114,100 Cost of goods sold (at standard) 634,000 Direct materials price variance-unfavorable 1,830 Direct materials quantity variance-favorable (720) Direct labor rate variance-favorable (1,240) Direct labor time variance-unfavorable 490 Variable factory overhead controllable variance-favorable (250) Fixed factory overhead volume variance-unfavorable 4,190 Interest expense 3,150 Sales 996,000 Selling expenses 136,500 Prepare an income statement for presentation to management. Enter all amounts as positive numbers except favorable variances. Use a minus sign to indicate favorable variances. If an amount box does not require an entry field, leave it blank. Arseneault Company Income Statement For the Month Ended December 31 Unfavorable Favorable Variance adjustments to gross profit at standard: Operating expenses: Other expense:
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 15E: Factory overhead cost variances The following data relate to factory overhead cost for the...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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