Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2020.

Costs and Production Data

Actual

Standard

Raw materials unit cost$2.30$2.20Raw materials units11,50011,000Direct labor payroll$152,440$147,440Direct labor hours14,80015,200Manufacturing overhead incurred$230,572Manufacturing overhead applied$233,472Machine hours expected to be used at normal capacity43,500Budgeted fixed overhead for June$69,600Variable overhead rate per machine hour$3.20Fixed overhead rate per machine hour$1.60

Overhead is applied on the basis of standard machine hours.3.20hours of machine time are required for each direct labor hour. The jobs were sold for $458,000. Selling and administrative expenses were $41,200. Assume that the amount of raw materials purchased equaled the amount used.

Compute all of the variances for (1) direct materials and (2) direct labor.(Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.)

(1)Total materials variance$

Favorable

Unfavorable

Neither favorable nor unfavorable

Materials price variance$

Favorable

Unfavorable

Neither favorable nor unfavorable

Materials quantity variance$

Favorable

Unfavorable

Neither favorable nor unfavorable

(2)Total labor variance$

Favorable

Unfavorable

Neither favorable nor unfavorable

Labor price variance$

Favorable

Unfavorable

Neither favorable nor unfavorable

Labor quantity variance$

Favorable

Unfavorable

Neither favorable nor unfavorable

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Compute the total overhead variance.

Total overhead variance$

Favorable

Unfavorable

Neither favorable nor unfavorable

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Prepare income statement for management. (Ignore income taxes.)(Round per unit values to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 52.)

AYALA CORPORATION

Income Statement

For the Month Ended June 30, 2020

June 30, 2020

For the Year Ended June 30, 2020

$

Dividends

Expenses

Gross Profit (Actual)

Gross Profit (at Standard)

Net Income / (Loss)

Revenues

Total Expenses

Total Revenues

Total Variance

Variances

Dividends

Expenses

Gross Profit (Actual)

Gross Profit (at Standard)

Net Income / (Loss)

Revenues

Total Expenses

Total Revenues

Total Variance

Variances

$

Neither favorable nor unfavorable

Favorable

Unfavorable

Unfavorable

Neither favorable nor unfavorable

Favorable

Favorable

Neither favorable nor unfavorable

Unfavorable

Neither favorable nor unfavorable

Favorable

Unfavorable

Neither favorable nor unfavorable

Unfavorable

Favorable

Dividends

Expenses

Gross Profit (Actual)

Gross Profit (at Standard)

Net Income / (Loss)

Revenues

Total Expenses

Total Revenues

Total Variance

Variances

Neither favorable nor unfavorable

Unfavorable

Favorable

Dividends

Expenses

Gross Profit (Actual)

Gross Profit (at Standard)

Net Income / (Loss)

Revenues

Total Expenses

Total Revenues

Total Variance

Variances

Dividends

Expenses

Gross Profit (Actual)

Gross Profit (at Standard)

Net Income / (Loss)

Revenues

Total Expenses

Total Revenues

Total Variance

Variances

$

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