Prepare an income statement for the year ended December 31,
through the gross profit for Baxter Company using the following
information:

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Question: Prepare an income statement for the year ended December 31, through the gross profit for Baxter C…
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Baxter Company sold 8,600 units at $135 per unit. Normal
production is 9,000 units. (Do not round fixed overhead rate
calculation when determining fixed factory overhead volume
variance.)

Standard: 5 yards per unit at $6.30 per yard Actual yards used: 43,240 yards at $6.25 per yard
Standard: 2.75 hours per unit at $16.00 Actual hours worked: 23,400 at $15.90 per hour
Standard: variable overhead $1.05 per unit
Standard: fixed overhead 2,500 (budgeted and actual
amount)
Actual total factory overhead: $237,500
Baxter Company
Income Statement Through Gross
Profit
For the Year Ended December
31
Sales $
Cost of goods sold – at standard
Gross profit – at standard
Favorable Unfavorable
Less variances from standard cost
Direct materials price $
Direct materials quantity $
Direct labor rate
Direct labor time
Factory overhead controllable
Factory overhead volume
Gross profit – actual $

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