Income Statement with Variances

Alvarado Company produces a product that requires 2.5 standard pounds per unit at a standard price of $3.05 per pound. Assume Alvarado sold 15,000 units at $170 per unit. The company used 34,000 pounds to produce 15,000 units, which were purchased at $3.30 per pound. Each unit requires 4 standard direct labor hours per unit at a standard hourly rate of $19.95 per hour. For the 15,000 units produced, 61,400 hours were needed and employees were paid an hourly rate of $19.80 per hour. The company uses a standard variable overhead cost per unit of $0.80 per direct labor hour. Actual variable factory overhead was $37,290. The company uses a standard fixed overhead cost per unit of $1.05 per direct labor hour at 58,000 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.

Open spreadsheet

Prepare an income statement through gross profit for Alvarado Company for the month ending March 31. For those boxes in which you must enter subtractive or negative numbers use a minus sign. If an amount box does not require an entry, leave it blank.

Line Item Description	Amount	Amount	Amount
Sales			$fill in the blank 2
Cost of goods soldat standard			fill in the blank 3
Gross profitat standard			$fill in the blank 4
	Unfavorable	Favorable
Variances from standard cost:
Direct materials price	$fill in the blank 5	$fill in the blank 6
Direct materials quantity	fill in the blank 7	fill in the blank 8
Direct labor rate	fill in the blank 9	fill in the blank 10
Direct labor time	fill in the blank 11	fill in the blank 12
Factory overhead controllable	fill in the blank 13	fill in the blank 14
Factory overhead volume	fill in the blank 15	fill in the blank 16
Net variances from standard cost-unfavorable			fill in the blank 17
Gross profit			$fill in the blank 18