Bellingham Company produces a product that requires 2.5 standard pounds per unit at a standard price of $3.75 per pound. The company used 36,000 pounds to produce 15,000 units, which were purchased at $4.00 per pound. Each unit requires 4 standard direct labor hours per unit at a standard hourly rate of $20 per hour. For the 15,000 units produced, 61,800 hours were needed and employees were paid an hourly rate of $19.85. The company uses a standard variable overhead cost per unit of $.90 per direct labor hour. The actual variable factory overhead was $52,770. The company uses a standard fixed overhead cost per unit of $1.15 per direct labor hour at 58,000 hours, which is 100% of normal capacity.

Required:

Prepare an income statement through gross profit for Bellingham Company for the month ending March 31. Assume Bellingham sold 15,000 units at $172 per unit. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Prepare an income statement through gross profit for Bellingham Company for the month ending March 31. Assume Bellingham sold 15,000 units at $172 per unit. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Bellingham Company

Income Statement Through Gross Profit

For the Year Ended March 31

1	Sales
2	Cost of goods sold—at standard
3	Gross profit—at standard
4		Favorable	Unfavorable
5	Variances from standard cost:
6	Direct materials price
7	Direct materials quantity
8	Direct labor rate
9	Direct labor time
10	Factory overhead controllable
11	Factory overhead volume
12	Net variances from standard cost—favorable
13	Gross profit

Answer rating: 100% (QA)

Before preparing the income statement it is required to compute the following items 1 ... View the full answer