Problem - ABC Inc. is a manufacturing firm specializing in classroom podiums. The accounting department employs standards based on 17,000 units of output/month.
You are given the following information about the standards:
Direct Material (6ft at $5)................................$30
Direct Labor (1.5 hours @ $2/hour)................$15
Fixed Overhead (1.5 hours at $2 /hour).........$ 3
Variable Overhead (1.5 hours at $4 /hour)...$ 6
Total.....................................................................$54
Actual results for the month of August are as follows:
Output .............................................................. 12,000 units sold at $75 /unit
Fixed Overhead....................................................................................................$33,000
Variable Overhead.............................................................................................. $69,000
Direct Material (71,750 ft purchsed and used ) .............................................$361,624
Direct Labor (17,900 hours).................................................................................$182,580
Required: Given the above information using the standard costing system, prepare the income statement showing all the variances for direct material, direct labor, variable and fixed overhead.