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Income Statement with Variances Encinas Company produces a product that requires 6 standard pounds per unit. The standard price is $1.75 per pound. The company produced 2,300 units that required 13,400 pounds, which were purchased at $2.00 per pound. The product also requires 3 standard hours per unit at a standard hourly rate of $21 per hour. The 2,300 units produced required 6,600 hours at an hourly rate of $20.50 per hour. In addition, the standard variable overhead cost per unit is $1.90 per hour and the actual variable factory overhead was $11,905. Finally, the standard fixed overhead cost per unit is $1.20 per hour at 7,100 hours, which is 100% of normal capacity. Prepare an income statement through gross profit for Encinas Company for the month ended July 31. Assume that Encinas sold 2,300 units at $270 per unit. If an amount box does not require an entry, leave it blank. Encinas Company Income Statement Through Gross Profit For the Month Ended July 31 Sales Cost of goods sold-at standard Gross profit-at standard Unfavorable Favorable Variance adjustment to gross profit at standard: Direct materials price Direct materials quantity Direct labor rate Direct labor time Factory overhead controllable Factory overhead volume Add net favorable variance from standard Gross profit-actual Q

Income Statement with Variances Encinas Company produces a product that requires 6 standard pounds per unit. The standard price is $1.75 per pound. The company produced 2,300 units that required 13,400 pounds, which were purchased at $2.00 per pound. The product also requires 3 standard hours per unit at a standard hourly rate of $21 per hour. The 2,300 units produced required 6,600 hours at an hourly rate of $20.50 per hour. In addition, the standard variable overhead cost per unit is $1.90 per hour and the actual variable factory overhead was $11,905. Finally, the standard fixed overhead cost per unit is $1.20 per hour at 7,100 hours, which is 100% of normal capacity. Prepare an income statement through gross profit for Encinas Company for the month ended July 31. Assume that Encinas sold 2,300 units at $270 per unit. If an amount box does not require an entry, leave it blank. Encinas Company Income Statement Through Gross Profit For the Month Ended July 31 Sales Cost of goods sold-at standard Gross profit-at standard Unfavorable Favorable Variance adjustment to gross profit at standard: Direct materials price Direct materials quantity Direct labor rate Direct labor time Factory overhead controllable Factory overhead volume Add net favorable variance from standard Gross profit-actual Q

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...
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Income Statement with Variances Encinas Company produces a product that requires 6 standard pounds per unit. The standard price is $1.75 per pound. The company produced 2,300 units that required 13,400 pounds, which were purchased at $2.00 per pound. The product also requires 3 standard hours per unit at a standard hourly rate of $21 per hour. The 2,300 units produced required 6,600 hours at an hourly rate of $20.50 per hour. In addition, the standard variable overhead cost per unit is $1.90 per hour and the actual variable factory overhead was $11,905. Finally, the standard fixed overhead cost per unit is $1.20 per hour at 7,100 hours, which is 100% of normal capacity. Prepare an income statement through gross profit for Encinas Company for the month ended July 31. Assume that Encinas sold 2,300 units at $270 per unit. If an amount box does not require an entry, leave it blank. Encinas Company Income Statement Through Gross Profit For the Month Ended July 31 Sales Cost of goods sold-at standard Gross profit-at standard Unfavorable Favorable Variance adjustment to gross profit at standard: Direct materials price Direct materials quantity Direct labor rate Direct labor time Factory overhead controllable Factory overhead volume Add net favorable variance from standard Gross profit-actual Q
Transcribed Image Text:Income Statement with Variances Encinas Company produces a product that requires 6 standard pounds per unit. The standard price is $1.75 per pound. The company produced 2,300 units that required 13,400 pounds, which were purchased at $2.00 per pound. The product also requires 3 standard hours per unit at a standard hourly rate of $21 per hour. The 2,300 units produced required 6,600 hours at an hourly rate of $20.50 per hour. In addition, the standard variable overhead cost per unit is $1.90 per hour and the actual variable factory overhead was $11,905. Finally, the standard fixed overhead cost per unit is $1.20 per hour at 7,100 hours, which is 100% of normal capacity. Prepare an income statement through gross profit for Encinas Company for the month ended July 31. Assume that Encinas sold 2,300 units at $270 per unit. If an amount box does not require an entry, leave it blank. Encinas Company Income Statement Through Gross Profit For the Month Ended July 31 Sales Cost of goods sold-at standard Gross profit-at standard Unfavorable Favorable Variance adjustment to gross profit at standard: Direct materials price Direct materials quantity Direct labor rate Direct labor time Factory overhead controllable Factory overhead volume Add net favorable variance from standard Gross profit-actual Q
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