Question

Alpine Productions uses a standard cost system for recording transactions. Alpine reported the following data for the year ended December​ 31: Sales​ revenues: $ 550 comma 000 Cost of goods sold​ (standard costing): $ 382 comma 500 Selling​ & administrative​ expenses: $ 90 comma 000 ​Variances: Sales revenue variance $ 4 comma 200 F Direct materials cost variance 30 U Direct materials efficiency variance 300 F Direct labor cost variance 65 U Direct labor efficiency variance 10 F Variable overhead cost variance 300 U Variable overhead efficiency variance 90 F Fixed overhead cost variance 430 U Fixed overhead volume variance 110 F What is the net operating income on a standard cost income​ statement?

Answer 1

Answer:

$81,385

Explanation:

The computation of net operating is shown below:-

Sales revenue = $550,000

Less: Cost of goods sold = $382,500

Less: Selling​ & administrative​ expenses = $90,000

Variance

Sales revenue variance = $4,200

Less: Direct materials cost variance = $30

Direct materials efficiency variance = $300

Less: Direct labor cost variance = $65

Direct labor efficiency variance = $10

Less: Variable overhead cost variance = $300

Variable overhead efficiency variance = $90

Less: Fixed overhead cost variance = $430

Fixed overhead volume variance $ = 110

So, the standard net operating income

= $554,710 - $473,325

= $81,385