The May 2012 revenue and cost information for Houston Outfitters, Inc., follows:

Requirement
1. Prepare a standard cost income statement for management through gross profit. Report all standard cost variances for management€™s use. Has management done a good or poor job of controlling costs?Explain.

Transcribed Image Text:

$ 540,000 Sales revenue Cost of goods sold (standard) Direct materials price variance Direct materials efficiency variance 341,000 1,100 F 6,100 F 4,200 U Direct labor price variance Direct labor efficiency variance 2,400 F Variable overhead spending variance 3,300 U Fixed overhead volume variance 8,100 F Fixed overhead spending variance Variable overhead efficiency variance 1,400 U 1,400 U