Pepper Industries Uses a Standard Cost Accounting System

question 64

Essay

Pepper Industries uses a standard cost accounting system. During March, 2016, the company reported the following manufacturing variances:
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.
Instructions
Prepare an income statement for management for the month ending March 31, 2016.

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Definitions:

Periodic Inventory Systems

An inventory system in which the inventory count is updated and the cost of goods sold is calculated periodically at specific intervals, often manually.

Direct Labor Costs

Direct labor costs are the wages paid to employees who are directly involved in the production of goods or services.

Factory Wages Payable

Liabilities owed by a company for labor costs associated with the manufacturing process that have not yet been paid.

Work in Process Inventory

Items that are in the production process but are not yet complete, representing one of the stages in the inventory cycle.