Tropic Zone Corporation experienced the following variances

Tropic Zone Corporation experienced the following variances: materials price $390 U, materials quantity $1,870 F, labor price $880 F, labor quantity $550 F, and overhead $1,320 U. Sales revenue was $101,300, and cost of goods sold (at standard) was $56,800.

Determine the actual gross profit.

Actual gross profit

$

Solution

Actual gross profit = Actual Sales - Actual cost of goods sold = $     1,01,300 - $       55,210 = $         46,090 Working: Standard Cost of goods sold $       56,800 Adjustments: Material: Price Variance 390 Quantity Variance -1870 $        -1,480 Labor: Price Variance -880 Quantity Variance -550 $        -1,430 Overhead Variance $         1,320 Actual cost of goods sold $       55,210