Prepare an income statement for the year ended December 31, 2012, through gross
ID: 2492443 • Letter: P
Question
Prepare an income statement for the year ended December 31, 2012, through gross profit for Aframe Company using the following information. Assume Aframe Company sold 2,800 units at $171 per unit. (Note: Normal production is 9,000 units) Standard: 3 yards per unit @ $6.70 per yard Actual yards used: 8,320 yards @ $6.65 per yard Standard: 5 hours per unit @ $16.70 Actual hours worked: 13,720 @ $16.90 per hour Standard: Variable overhead $2.65 per unit Standard: Fixed overhead $1.40 Actual total factory overhead $19,400 (budgeted and actual amount) income statement through gross profit for the year ended december 31, 2012
Explanation / Answer
Income statement
For the year ended December 31, 2012
Actual
Sales (2800 Units * $171)
$ 478,800.00
Less: Cost of Good sold:
Cost of Yards used (8,320 yards * $6.65 )
$ 55,328.00
Labor cost (13720 hours * $16.90)
$ 231,868.00
Total overhead cost
$ 19,400.00
$ 306,596.00
Gross Profit
$ 172,204.00
Income statement
For the year ended December 31, 2012
Budgeted
Sales (9000 Units * $171)
$ 1,539,000.00
Less: Cost of Good sold:
Cost of Yards used (9000 Units * 3 yards * $6.70 )
$ 180,900.00
Labor cost (9000 units * 5 hours * $16.70)
$ 751,500.00
Variable Overhead costs (9000 units * $2.65)
$ 23,850.00
Fixed Overhead costs (9000 units * $1.40)
$ 12,600.00
$ 968,850.00
Gross Profit
$ 570,150.00
Income statement
For the year ended December 31, 2012
Actual
Sales (2800 Units * $171)
$ 478,800.00
Less: Cost of Good sold:
Cost of Yards used (8,320 yards * $6.65 )
$ 55,328.00
Labor cost (13720 hours * $16.90)
$ 231,868.00
Total overhead cost
$ 19,400.00
$ 306,596.00
Gross Profit
$ 172,204.00
Income statement
For the year ended December 31, 2012
Budgeted
Sales (9000 Units * $171)
$ 1,539,000.00
Less: Cost of Good sold:
Cost of Yards used (9000 Units * 3 yards * $6.70 )
$ 180,900.00
Labor cost (9000 units * 5 hours * $16.70)
$ 751,500.00
Variable Overhead costs (9000 units * $2.65)
$ 23,850.00
Fixed Overhead costs (9000 units * $1.40)
$ 12,600.00
$ 968,850.00
Gross Profit
$ 570,150.00