The following data were taken from the records of Griggs Company for December 2014:

The following data were taken from the records of Griggs Company for December 2014:

Administrative expenses $100,800
Cost of goods sold (at standard) 550,000
Direct materials price variance—unfavorable 1,680
Direct materials quantity variance—favorable 560
Direct labor rate variance—favorable 1,120
Direct labor time variance—unfavorable  490
Variable factory overhead controllable variance—favorable 210
Fixed factory overhead volume variance—unfavorable 3,080
Interest expense 2,940
Sales 868,000
Selling expenses 125,000

Prepare an income statement for presentation to management.

Answer:


GRIGGS COMPANY 
Income Statement 
For the Month Ended December 31, 2014 
Sales $868,000 
Cost of goods sold—at standard 550,000 
Gross profit—at standard $318,000 
    F
avorable Unfavorable  
Less variances from standard cost:    
Direct materials price $ — $ 1,680  
Direct materials quantity 560 —  
Direct labor rate 1,120 —  
Direct labor time — 490  
Variable factory overhead controllable 210 —  
Fixed factory overhead volume — 3,080 3,360 
Gross profit   $314,640 
Operating expenses:    
Selling expenses  $125,000  
Administrative expenses  100,800 225,800 
Income from operations   $  88,840 
Other expense:    
Interest expense   2,940 
Income before income tax   $  85,900