Western Outfitters’ revenue and expense information for April follows:
Sales revenue..................................................................................... $560,000
Cost of goods sold (standard)............................................................ 342,000
Direct materials price variance.......................................................... 2,000 F
Direct materials efficiency variance................................................... 6,000 F
Direct labour price variance.............................................................. 4,000 U
Direct labour efficiency variance....................................................... 2,000 F
Overhead flexible budget variance .................................................... 3,500 U
Production volume variance.............................................................. 8,000 F
Requirement
Prepare a standard cost income statement for management through gross profit. Report all standard cost variances for management’s use. Has management done a good or poor job of controlling costs? Explain.