Income Statement with Variances

Alvarado Company produces a product that requires $3\mathrm{.}0$ standard pounds per unit at a standard price

of $$3\mathrm{.}95$ per pound. Assume Alvarado sold $17,000$ units at $$168$ per unit. The company used $34,000$

pounds to produce $17,000$ units, which were purchased at $$4\mathrm{.}20$ per pound. Each unit requires $3$

standard direct labor hours per unit at a standard hourly rate of $$19\mathrm{.}25$ per hour. For the $17,000$ units

produced, $62,800$ hours were needed and employees were paid an hourly rate of $$19\mathrm{.}10$ per hour. The

company uses a standard variable overhead cost per unit of $$0\mathrm{.}80$ per direct labor hour. Actual variable

factory overhead was $$30,680.$ The company uses a standard fixed overhead cost per unit of $$1\mathrm{.}05$ per

direct labor hour at $40,000$ hours, which is $100\%$ of normal capacity.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform

the required analysis, and input your answers in the question below.

Alvarado Company

Income Statement Through Gross Profit

For the Month Ended March $31$

Sales

$$2,856,000$

Cost of goods sold$-$at standard

Gross profit$-$at standard

Unfavorable

Favorable

Variances from standard cost:

Direct materials price

Direct materials quantity

Direct labor rate

Direct labor time

Factory overhead controllable

Factory overhead volume

Net variances from standard cost$-$unfavorable

Gross profit

$

$

x

$$

$