Alpine Productions Uses a Standard Cost System for Recording Transactions

question 19

Multiple Choice

Alpine Productions uses a standard cost system for recording transactions.Alpine reported the following data for the year ended December 31: Sales revenues: $550,000
Cost of goods sold (standard costing) : $382,000
Selling & admin expenses: $90,000
Variances:
$$\begin{array} { | l | r | c | } \hline \text { Sales revenue variance } & \$ 4,100 & \mathrm {~F} \\\hline \text { Direct materials cost variance } & 10 & \mathrm { U } \\\hline \text { Direct materials efficiency variance } & 250 & \mathrm {~F} \\\hline \text { Direct labor cost variance } & 65 & \mathrm { U } \\\hline \text { Direct labor efficiency variance } & 30 & \mathrm {~F} \\\hline \text { Variable overhead cost variance } & 225 & \mathrm { U } \\\hline \text { Variable overhead efficiency variance } & 95 & \mathrm {~F} \\\hline \text { Fixed overhead cost variance } & 410 & \mathrm { U } \\\hline \text { Fixed overhead volume variance } & 130 & \mathrm {~F} \\\hline\end{array}$$ What is the standard net operating income?

• A) $77,795
• B) $81,895
• C) $171,895
• D) $78,000

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Definitions:

Income Taxes

Taxes levied by governments on the income generated by businesses and individuals within their jurisdiction.

Formal Written Statement

A document that articulates official information or positions in a structured and official manner.

Merchandise Purchases

Transactions involving the buying of goods for resale, typically recorded as inventory in a business's accounting records.

Gross Profit

The difference between revenue and the cost of goods sold before deduction of overheads, payroll, taxation, and interest payments.