Prepare the income statement

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Problem - ABC Inc. is a manufacturing firm specializing in classroom podiums. The accounting department employs standards based on 17,000 units of output/month.

You are given the following information about the standards:

Direct Material (6ft at $5)................................$30

Direct Labor (1.5 hours @ $2/hour)................$15

Fixed Overhead (1.5 hours at $2 /hour).........$ 3

Variable Overhead (1.5 hours at $4 /hour)...$ 6

Total.....................................................................$54

Actual results for the month of August are as follows:

Output .............................................................. 12,000 units sold at $75 /unit

Fixed Overhead....................................................................................................$33,000

Variable Overhead.............................................................................................. $69,000

Direct Material (71,750 ft purchsed and used ) .............................................$361,624

Direct Labor (17,900 hours).................................................................................$182,580

Required: Given the above information using the standard costing system, prepare the income statement showing all the variances for direct material, direct labor, variable and fixed overhead.

Reference no: EM131646198

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