Problem 24-02A

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		$2.20		$2.10
Raw materials units		11,400		10,700
Direct labor payroll		$175,500		$167,200
Direct labor hours		15,000		15,200
Manufacturing overhead incurred		$202,600
Manufacturing overhead applied				$205,200
Machine hours expected to be used at normal capacity				43,500
Budgeted fixed overhead for June				$65,250
Variable overhead rate per machine hour				$3.00
Fixed overhead rate per machine hour				$1.50

Overhead is applied on the basis of standard machine hours. 3.00 hours of machine time are required for each direct labor hour. The jobs were sold for $492,000. Selling and administrative expenses were $39,500. 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		$		FavorableUnfavorableNeither favorable nor unfavorable
		Materials price variance		$		FavorableUnfavorableNeither favorable nor unfavorable
		Materials quantity variance		$		FavorableUnfavorableNeither favorable nor unfavorable
(2)		Total labor variance		$		FavorableUnfavorableNeither favorable nor unfavorable
		Labor price variance		$		FavorableUnfavorableNeither favorable nor unfavorable
		Labor quantity variance		$		FavorableUnfavorableNeither favorable nor unfavorable

SHOW LIST OF ACCOUNTS

Compute the total overhead variance.

Total overhead variance

$

FavorableUnfavorableNeither favorable nor unfavorable

SHOW LIST OF ACCOUNTS

Prepare an 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 Year Ended June 30, 2020June 30, 2020For the Month Ended June 30, 2020
			$
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances
	$	FavorableNeither favorable nor unfavorableUnfavorable
		Neither favorable nor unfavorableUnfavorableFavorable
		Neither favorable nor unfavorableUnfavorableFavorable
		FavorableNeither favorable nor unfavorableUnfavorable
		UnfavorableNeither favorable nor unfavorableFavorable
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances		Neither favorable nor unfavorableUnfavorableFavorable
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances
DividendsExpensesGross Profit (Actual)Gross Profit (at Standard)Net Income / (Loss)RevenuesTotal ExpensesTotal RevenuesTotal VarianceVariances			$