Palmer Productions Uses a Standard Cost System Prepare a Multi-Step, Standard Cost Income Statement

question 206

Essay

Palmer Productions uses a standard cost system. On December 31, the account balances include the following:
Sales Revenues: $750,000
Cost of Goods Sold (standard costing): $400,500
Selling & Administrative expenses: $150,000
Variances:
$$\begin{array} { | l | r | c | } \hline \text { Sales revenue variance } & \$ 6,000 & \text { F } \\\hline \text { Direct materials cost variance } & 400 & \text { U } \\\hline \text { Direct materials efficiency variance } & 375 & \text { F } \\\hline \text { Direct labor cost variance } & 675 & \text { U } \\\hline \text { Direct labor efficiency variance } & 150 & \text { F } \\\hline \text { Variable overhead cost variance } & 250 & \text { U } \\\hline \text { Variable overhead efficiency variance } & 800 & \text { F } \\\hline \text { Fixed overhead cost variance } & 420 & \text { U } \\\hline \text { Fixed overhead volume variance } & 100 & \text { F } \\\hline\end{array}$$ Prepare a multi-step, standard cost income statement.

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Definitions:

Incentive

Something that motivates or encourages an individual to do something or to achieve a goal.

Environmental Stimulus

Any external event or factor that influences an organism's behavior or physiological responses.

Motivates Behavior

The underlying reasons or incentives that drive individuals to engage in certain actions or behaviors.

Homeostasis

The autonomous mechanism through which living organisms maintain balance while adapting to conditions most favorable for their survival.