Fisk Company uses a standard cost accounting system. During January, the company reported the following manufacturing variances.
| Materials price variance | $1,400 | U | Labor quantity variance | $950 | U | |||
| Materials quantity variance | 780 | F | Overhead variance | 700 | U | |||
| Labor price variance | 520 | U |
In addition, 8,870 units of product were sold at $7 per unit. Each unit sold had a standard cost of $4. Selling and administrative expenses were $7,410 for the month.
Prepare an income statement for management for the month ended January 31, 2017.
| FISK COMPANY | ||
| Income Statement | ||
| For the Month Ended January 31, 2017 | ||
| Sales (8,870 X $ 7)……… | 62090 | |
| Cost of goods sold (8,870 X $4) .. | -35480 | |
| Gross profit (at standard)…………. | 26610 | |
| Variances | ||
| Materials price………………….. | 1400 | |
| Materials quantity…………………….. | -780 | |
| Labor price ………………………….. | 520 | |
| Labor quantity ………………………. | 950 | |
| Overhead………………………………… | 700 | |
| Total variance—unfavorable ….. | 2790 | |
| Gross profit (actual) …………. | 23820 | |
| Selling and administrative expenses + | 23820 | |
| Net income ………. | 47640 | |
