Maroon, Inc. uses a standard cost system. On December 31, the last day of the accounting period, the account balances include the following

Question

What is the standard net operating income of the company for the year ended December 31?

A) $8,780
B) $6,290
C) $8,470
D) $7,530

Answer 1

D .D)
Maroon, Inc.
Standard Cost Income Statement
For the Year Ended December 31, 20XX
Sales Revenue at standard $150,000
Sales Revenue Variance (4,000 )
Sales Revenue at actual 146,000
Cost of Goods Sold at standard $78,000
Manufacturing Cost Variances:
Direct Materials Cost Variance $300
Direct Materials Efficiency Variance (25 )
Direct Labor Cost Variance 800
Direct Labor Efficiency Variance 70
Variable Overhead Cost Variance 200
Variable Overhead Efficiency Variance (800 )
Fixed Overhead Cost Variance (90 )
Fixed Overhead Volume Variance 15
Total Manufacturing Variances 470
Cost of Goods Sold at actual (78,470 )
Gross Profit 67,530
Selling and Administrative Expenses (60,000 )
Operating Income $7,530