Preparing a standard cost income statement The May 2012 revenue and cost information for Houston Outfitters, Inc., follows:
|
Sales revenue |
$ 540,000 |
|
Cost of goods sold (standard) |
341,000 |
|
Direct materials price variance |
1,100 F |
|
Direct materials efficiency variance |
6,100 f |
|
Direct labor price variance |
4,200U |
|
Direct labor efficiency variance |
2,400 F |
|
Variable overhead spending variance |
3,300 |
|
Fixed overhead volume variance |
8,100 F |
|
Fixed overhead spending variance |
1,400 U |
|
Variable overhead efficiency variance |
1,400U |
Requirement
1. Prepare a standard cost income statement for management through gross profit. Report all standard cost variances for management’s use. Has management done a good or poor job of controlling costs? Explain.