Question

Pepper Industries uses a standard cost accounting system. During March, 2019, the company reported the following manufacturing variances:

Materials price variance		$1,600	F
Materials quantity variance		2,400	U
Labor price variance		600	U
Labor quantity variance		2,200	U
Overhead controllable		500	F
Overhead volume		3,000	U

In addition, 15,000 units of product were sold at $18 per unit. Each unit sold had a standard cost of $14. Selling and administrative expenses for the month were $15,000.

Prepare an income statement for management for the month ending March 31, 2019. (Enter favorable variance using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

PEPPER INDUSTRIES Income Statement For the Month Ended March 31, 2019
Selling and Administrative ExpensesSalesNet Income / (Loss)Gross Profit (at standard)Total VariancesGross profit (actual)Materials QuantityCost of Goods SoldVariances				$
Gross profit (actual)Total VariancesVariancesGross Profit (at standard)Materials QuantitySalesSelling and Administrative ExpensesNet Income / (Loss)Cost of Goods Sold
Net Income / (Loss)Gross Profit (at standard)VariancesSelling and Administrative ExpensesMaterials QuantityTotal VariancesGross profit (actual)SalesCost of Goods Sold
Labor QuantityLabor PriceMaterials QuantityVariancesMaterials PriceOverhead VolumeOverhead ControllableTotal Variances
Overhead Volume    Labor Price    Overhead Controllable    Materials Quantity    Labor Quantity    Variances    Total Variances    Materials Price		$
Variances    Overhead Volume    Materials Price    Materials Quantity    Labor Price    Total Variances    Labor Quantity    Overhead Controllable
Labor Price    Variances    Materials Price    Overhead Volume    Labor Quantity    Materials Quantity    Overhead Controllable    Total Variances
Labor Price    Materials Price    Total Variances    Labor Quantity    Variances    Overhead Volume    Materials Quantity    Overhead Controllable
Materials Quantity    Overhead Controllable    Variances    Overhead Volume    Total Variances    Labor Price    Materials Price    Labor Quantity
Materials Quantity    Labor Price    Overhead Controllable    Materials Price    Overhead Volume    Total Variances    Labor Quantity    Variances
Materials Price    Materials Quantity    Overhead Volume    Total Variances    Variances    Labor Price    Labor Quantity    Overhead Controllable
Materials QuantityGross profit (actual)SalesCost of Goods SoldGross Profit (at standard)VariancesNet Income / (Loss)Selling and Administrative ExpensesTotal Variances
SalesGross Profit (at standard)Gross profit (actual)Materials QuantityCost of Goods SoldVariancesSelling and Administrative ExpensesNet Income / (Loss)Total Variances
Gross Profit (at standard)Net Income / (Loss)Gross profit (actual)SalesCost of Goods SoldVariancesSelling and Administrative ExpensesTotal VariancesMaterials Quantity				$

Answer 1

Answer-

PEPPER INDUSTRIES
INCOME STATEMENT
FOR THE MONTH ENDED MARCH 31,2019
PARTICULARS		AMOUNT
		$
Sales	15000 units*$18 per unit	270000
Less- Cost of goods sold	15000 units*$14 per unit	210000
Gross profit (at standard)		60000
Variances:-
Materials price	($1600)
Materials quantity	$2400
Labor price	$600
Labor quantity	$2200
Overhead controllable	($500)
Overhead volume	$3000
Total variance (unfavorable)		6100
Gross profit (actual)		53900
Less- Selling & administrative expenses		15000
Net Income		38900