Income Statement with Variances Bellingham Company produces a product that requires 2.5 standard pounds per unit at a standard price of $3.75 per pound. The company used 36,000 pounds to produce 15,000 units, which were purchased at $4.00 per pound. Each unit requires 4 standard direct labor hours per unit at a standard hourly rate of $20 per hour. For the 15,000 units produced, 61,800 hours were needed and employees were paid an hourly rate of $19.85 per hour. The company uses a standard variable overhead cost per unit of $0.90 per direct labor hour. Actual variable factory overhead was $52,770. The company uses a standard fixed overhead cost per unit of $1.15 per direct labor hour at 58,000 hours, which is 100% of normal capacity. Prepare an income statement through gross profit for Bellingham Company for the month ending March 31. Assume Bellingham sold 15,000 units at $172 per unit. 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.. Bellingham Company Income Statement Through Gross Profit For the Month Ending March 31 Sales Cost of goods sold-at standard Gross profit-at standard Favorable Unfavorable 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-favorable Gross orofit Previous Next Standard Direct Materials Cost per Unit Crazy Delicious Inc. produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (1,009 bars) are as follows: Ingredient Quantity Price Cocoa 450 lbs. $0.30 per lb. Sugar 120 lbs. $0.60 per lb. Milk 90 gal. $1.40 per gal. Determine the standard direct materials cost per bar of chocolate. If required, round to the nearest cent. per bar Standard Product Cost Atlas Furniture Company manufactures designer home furniture. Atlas uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows: Direct labor: standard rate $15.00 per hr. standard time per unit 3.5 hrs. Direct materials (oak): standard price $8.00 per bd. ft. standard quantity 19 bd. ft. Variable factory overhead: standard rate $2.40 per direct labor hr. Fixed factory overhead: standard rate $1.20 per direct labor hr. a. Determine the standard cost per dining room table. If required, round your answer to two decimal places. per table b. A standard cost system provides Atlas Furniture Company's management a cost control tool using the principle of management by exception Using this principle, major cost deviations from standards can be investigated and corrected, Feedback Check My Work Remember the process discussed in chapter for calculating standard cost. Review the benefits of standard cost systems. Direct Materials Variances of The following data relate to the direct materials cost for the production of 2,100 automobile tires: Actual: 60,000 lbs. at $1.85 per lb. Standard: 58,200 lbs. at $1.90 per Ib. a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number Direct Materials Price Variance Favorable Direct Materials Quantity Variance Unfavorable Total Direct Materials Cost Variance Unfavorable b. The direct materials price variance should normally be reported to the Purchasing Department . When lower amounts of direct materials are used because of production efficiencies, the variance would be reported to the Production Supervisor . When the favorable use of raw materials is caused by the purchase of higher-quality raw materials, the variance should be reported to the Purchasing Department DW dg M Feedback
