Cost of goods Sold
Beginning WIP		0
Direct material
Material : Beginning	0
Add: Purchase for the month of Jan	$ 20,000.00
Material available for use	20000
Deduct : ending material (20% of purchase)	4000
Material Used ( 80% of Material purchased)		$ 16,000.00
Direct Labor		8493.33
Over head		3765.00
Total Cost( Material + Labor+ overhead)		$ 28,258.33
Deduct : Ending WIP		0
Cost of goods sold		$ 28,258.33

Income Statement

Revenue			$ 38,020.00
Cost of goods sold			$ (28,258.33)
Gross Profit (Revenue - Cost of goods sold)			$ 9,761.67
Expenses:
General and administrative salaries(1950+500)		$ 2,450.00
Depreciation		165.00
Rent		750.00
Utilities and insurance		600.00
Gas Costs for Cooking		$ 1,200.00
Loan		550.00
Total expenses			$ 5,715.00
Net Income/Loss			$ 4,046.67

Variances

	Budgeted	Budgeted	Actual	Actual
	Standard	Standard	Hours/qty	Rate
	Hours/qty	Rate
Labor	160	$ 16.00	180	$ 16.50
Material	600	$ 9.10	660	$ 10.00

Significance of Variances

Required: Statement of Cost of Goods Sold: logically interpret the business's performance against the provided benchmarks. Income Statement: logically interpret the business's performance against the provided benchmarks. Variances: Illustrate all variances for the direct labor time and the materials price. Significance of Variances: Evaluate the significance of the variances in terms of the potential to impact future budgeting decisions and planning.