Ayala Corporation accumulates the following data relative to

Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2014. Raw materials unit cost Raw materials units used Direct labor payrol Direct labor hours worked Manufacturing overhead incurred Manufacturing overhead applied Machine hours expected to be used at normal capacity Budgeted fixed overhead for June Variable overhead rate per machine hour Fixed overhead rate per machine hour $2.50 11,400 $2.35 10,940 $166,880 $162,639 15,300 14,900 $229,597 $232,407 42,000 $75,600 $3.10 $1.80 Overhead is applied on the basis of standard machine hours. 3.10 hours of machine time are required for each direct labor hour. The jobs were sold for $480,000. Selling and administrative expenses were $41,000. Assume that the amount of raw materials purchased equaled the amount used (a) & (b) Your answer is correct. Compute all of the variances for (1) direct materials and (2) direct labor (Round answers to 0 decimal places, e.g. 125.) (1) Total materials variance 2791 Unfavorable 1710 Unfavorable 1081 Unfavorable 4241 Unfavorable 8493 Unfavorable 42521 Favorable Materials price variance Materials quantity variance (2) Total labor variance Labor price vanance Labor quantity variance Compute the total overhead variance Total overhead variance 2810 Favorable Click if you would like to Show Work for this question: Open Show Work

Solution

Solution c:

Ayala Corporation
Income Statement
For the month ended June 30, 2014
Particulars			Amount
Sales revenue			$480,000.00
Cost of goods sold (At standard) (10940*$2.35 + $162,639 + $232,407)			-$420,755.00
Gross Profit (At standard)			$59,245.00
Variances:
Material price	-$1,710.00	U
Material quantity	-$1,081.00	U
Labor Price	-$8,493.00	U
Labor quantity	$4,252.00	F
Overhead	$2,810.00	F
Total variance		U	-$4,222.00
Gross Profit (Actual)			$55,023.00
Selling and administrative expenses			-$41,000.00
Net Income (Loss)			$14,023.00