Refer to the Groovy Bottles Data Set in E10-53B. The cost of goods sold at standard cost totaled $379,500. Prepare a standard cost income statement for Groovy Bottles’ management, using Exhibit 10-19 as a guide. Assume that sales were $600,300 and actual marketing and administrative expenses were $80,500.
In Exercise Groovy Bottles is a manufacturer of ceramic bottles. The company has the following standards:
Direct materials (clay)....................... 1.3 kg per bottle, at a cost of $0.40 per kg
Direct labour...................................... 1/5 hour per bottle, at a cost of $14.80 per hour
Static budget variable overhead............................ $70,500
Static budget fixed overhead ................................. $30,500
Static budget direct labour hours................................. 10,000 hours
Static budget number of bottles.................................... 52,000
Groovy Bottles allocates manufacturing overhead to production based on standard direct labour hours. Last month the company reported the following actual results for the production of 69,000 bottles:
Direct materials........................................ 1.5 kg per bottle, at a cost of $0.70 per kg
Direct labour............................................. 1/4 hour per bottle, at a cost of $12.90 per hour
Actual variable overhead.......................... $104,600
Actual fixed overhead .............................. $ 28,700