Baxter Company sold 8,600 units at $125 per unit. Normal production is 9,000 units. Standard: 5...
Baxter Company sold 8,600 units at $125 per unit. Normal
production is 9,000 units.
| Standard: 5 yards per unit at $6.30 per yard | Actual yards used: 43,240 yards at $6.25 per yard |
| Standard: 2.25 hours per unit at $15.00 | Actual hours worked: 19,100 hours at $14.90 per hour |
| Standard: Variable overhead at $1.05 per unit | |
| Standard: Fixed overhead $211,500 (budgeted and actual amount) | Actual total factory overhead: $235,500 |
Prepare an income statement that includes variances for the year ending December 31 through gross profit for Baxter Company using the above information. Enter favorable variances as negative numbers. Do not round fixed overhead rate calculation when determining fixed factory overhead volume variance.
| Baxter Company | |||
| Income Statement Through Gross Profit | |||
| For the Year Ending December 31 | |||
| Sales | $ | ||
| Cost of goods sold—at standard | |||
| Gross profit—at standard | $ | ||
| Unfavorable | Favorable | ||
| Less variances from standard cost | |||
| Direct materials price | $ | ||
| Direct materials quantity | $ | ||
| Direct labor rate | |||
| Direct labor time | |||
| Factory overhead controllable | |||
| Factory overhead volume | |||
| Net variance from standard cost—unfavorable | |||
| Gross profit—actual | $ | ||
Homework Answers
IF YOU HAVE ANY DOUBTS COMMENT BELOW I WILL BE TTHERE TO HELP YOU..ALL THE BEST..
AS FOR GIVEN DATA..
Baxter Company sold 8,600 units at $125 per unit. Normal production is 9,000 units.
| Standard: 5 yards per unit at $6.30 per yard | Actual yards used: 43,240 yards at $6.25 per yard |
| Standard: 2.25 hours per unit at $15.00 | Actual hours worked: 19,100 hours at $14.90 per hour |
| Standard: Variable overhead at $1.05 per unit | |
| Standard: Fixed overhead $211,500 (budgeted and actual amount) | Actual total factory overhead: $235,500 |
| Income Statement | |||
| Particular | Amount | Amount | Amount |
| Income Statement | |||
| Sales(8600X125) | $1,075,000.00 | ||
| Less; COGS (8600X89.80) | $772,280.00 | ||
| Gross Profit | $302,720.00 | ||
| Favourable | Unfavourable | ||
| Direct Material Price(43240($6.30-$6.25) | $2,162.00 | ||
| Direct Material Qty ( (8600X5)-43240)$6.30 | $1,512.00 | ||
| Direct Labour Rate(19100($15-$14.90) | $1,910.00 | ||
| Direct Labour Efficiency((8600X2.25)-19100)*$15 | $3,750.00 | ||
| Factory OH Volume(8600-9000)X$23.50 | $9,400.00 | ||
| Faactory OH Controllable (8600X$1.05)-($235500-$211500) | $14,970.00 | -$18,060.00 | |
| Net Favourable | |||
| Net Income | $284,660.00 | ||
| Calcualtion of COGS (Standard) | |
| Direct Material (5 YardX $6.30) | $31.50 |
| Direct Labour(2.25Hour X $15) | $33.75 |
| Variable Overhead | $1.05 |
| Fixed OH(211500/9000) | $23.50 |
| Total COGS | $89.80 |
I HOPE YOU UNDERSTAND..
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