Income Statement Indicating Standard Cost Variances The following data were taken from the records of Griggs Company for December: Administrative expenses $100,800 Cost of goods sold (at standard) 550,000 Direct materials price variance—unfavorable 1,680 Direct materials quantity variance—favorable (560) Direct labor rate variance—favorable (1,120) Direct labor time variance—unfavorable 490 Variable factory overhead controllable variance—favorable (210) Fixed factory overhead volume variance—unfavorable 3,080 Interest expense 2,940 Sales 868,000 Selling expenses 125,000 Prepare an income statement for presentation to management. Enter all amounts as positive numbers except favorable variances. Use a minus sign to indicate favorable variances. Griggs Company Income Statement For the Month Ended December 31 $ $ Unfavorable Favorable Less variance adjustments to gross profit—at standard: $ $ $ Operating expenses: $ $ Other expense: $

Answer and Explanation:

The preparation of the income statement is shown below:

          Income statement indicating the cost variances

Particulars                       Amount               Amount                 Amount

Sales                                                                                           $868,000

Less: Cost of goods

sold                                                                                            -$550,000

Gross profit                                                                                 $318,000

                                          Favorable               Unfavorable

Less: Variances from

standard cost

Direct materials price variance                        $1,680

Direct materials quantity variance $560

Direct labor time variance                                $490

Variable factory overhead

controllable variance                      $490

Fixed factory overhead volume variance        $3,080             -$3,360

                                                                                                     $314,640

Less: Operating expenses:

Administrative expenses                                     $100,800

Selling expenses                                                   $125,000       -$225,800

                                                                                                       $88,840

Less: Other expenses:

Interest expenses                                                                         -$2,940

Net income                                                                                      $85,900

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

a

explanation:

reducti0n

\