Wurstenheimer Company is a small manufacturer of specialty meat products which utilizes a standard cost system. The following standards have been developed for one pound of smoked German sausage.

(a) the standard mix of ingredients,

(b) the standard quantity of each ingredient allowed for the output attained, and

(c) the materials yield variance for Wurstenheimer Company for June.

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Pork (.9 lb. @$2.00) Cereal (.15 lb. @ $.50) $ 1.800 .075 Spices (.15 lb. @ $6.00) .900 $2.775 'The ingredients are blended, cooked, and smoked, utilizing a traditional family process before being packaged. During June, little Johnny Wurstenheimer was home from col- lege and supervised the process while his parents were on vacation. During the month 1,000 pounds of German sausage were produced using the following ingredients: Pork 1,200 lbs. Cereal 200 lbs. Spices 200 lbs. 1,600 lbs. Total Upon returning from vacation, Johnny's parents concluded that the sausage, although very tasty, had been overcooked. Johnny, an accounting student, was asked to deter- mine the effect on net income of his mistake. You can help Johnny in his predicament by computing: