Alvarado Company produces a product that requires $3\mathrm{.}0$ standard pounds per unit at a standard price of $$6\mathrm{.}00$ per pound. The company used $23,900$ pounds to produce $8,000$ units, which were purchased at $$6\mathrm{.}20$ per pound. Each unit requires $7\mathrm{.}5$ standard direct labor hours per unit at a standard hourly rate of $$22\mathrm{.}50$ per hour. For the $8,000$ units produced, $60,200$ hours were needed and employees were paid an hourly rate of $$21\mathrm{.}95$ per hour. The company uses a standard variable overhead cost per unit of $$1\mathrm{.}45$ per direct labor hour. Actual variable factory overhead was $$85,900.$ The company uses a standard fixed overhead cost per unit of $$2\mathrm{.}00$ per direct labor hour at $55,000$ hours, which is $100\%$ of normal capacity.

Required:

Prepare an income statement through gross profit for Alvarado Company for the month ended March $31.$ Assume Alvarado sold $8,000$ units at $$250$ per unit.Prepare an income statement through gross profit for Alvarado Company for the month ended March $31.$ Assume Alvarado sold $8,000$ units at $$250$ per unit.

Income Statement Instruction

Alvarado Company

Income Statement Through Gross Profit

For the Month Ended March $31$

$1$

Sales

$$2,000,000\mathrm{.}00$

$2$

Cost of goods sold$$at standard

$3$

Gross profit$$at standard

$4$

Unfavorable

Favorable

$5$

Variances from standard cost:

$6$

Direct materials price

$7$

Direct materials quantity

$8$

Direct labor rate

$9$

Direct labor time

$10$

Factory overhead controllable

$11$

Factory overhead volume

$12$

Net variances from standard cost$$favorable

$13$

Gross profit