Alpine Productions Uses a Standard Costing System for Recording Transactions;

question 73

Essay

Alpine Productions uses a standard costing system for recording transactions; they also prepare an internal-use income statement using standard cost methodology. At the end of 2011, Alpine reported the following data:
Sales Revenues: $500,000
Cost of Goods Sold (standard costing) $382,500
Marketing & Admin expenses $105,000
Variances:
$\begin{array}{|l|r|c|}\hline \text { Sales revenue } & \$ 4,000 & F \\\hline \text { Direct materials price variance } & 20 & \mathrm{U} \\\hline \text { Direct materials efficiency variance } & 300 & \mathrm{~F} \\\hline \text { Direct labor price variance } & 75 & \mathrm{U} \\\hline \text { Direct labor efficiency variance } & 10 & \mathrm{~F} \\\hline \text { Variable overhead spending variance } & 225 & \mathrm{U} \\\hline \text { Variable overhead efficiency variance } & 80 & \mathrm{~F} \\\hline \text { Fixed overhead spending variance } & 420 & \mathrm{U} \\\hline \text { Fixed overhead volume variance } & 110 & \mathrm{~F} \\\hline\end{array}$
Using the format below, please prepare a statement of operating income.
$$\begin{array} { | l | l | l | l | } \hline \text { Sales revenue (standard) } & & & \\\hline \text { Sales revenue variance } & & & \\\hline \text { Sales revenue (actual) } & & & \\\hline \text { Cost of goods sold (standard) } & & & \\\hline \text { Manufacturing variances } & & & \\\hline \text { (Credit balances in parentheses) } & & & \\\hline \text { Direct materials price variance } & & & \\\hline \text { Direct materials efficiency variance } & & & \\\hline \text { Direct labor price variance } & & & \\\hline \text { Direct labor efficiency variance } & & & \\\hline \text { Variable overhead spending variance } & & & \\\hline \text { Variable overhead efficiency variance } & & & \\\hline \text { Fixed overhead spending variance } & & & \\\hline \text { Fixed overhead volume variance } & & & \\\hline \text { Cost of goods sold (actual) } & & & \\\hline \text { Gross profit } & & & \\\hline \text { Marketing and admin. expenses } & & & \\\hline \text { Net operating income/(loss) } & & & \\\hline\end{array}$$

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Definitions:

Bailment Created

The legal relationship established when personal property is transferred from one party to another under an agreement for a specific purpose.

Simple Delivery Service

A basic service that transports goods from one location to another without additional services or complexities.

Act of God

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Shed

A simple roofed structure used for storage, hobbies, or as a workshop.