Exercise 1
North Company has completed all of its operating budgets. The sales budget for the year shows 50,120 units and total sales of $2,128,200. The total unit cost of making one unit of sales is $22. Selling and administrative expenses are expected to be $305,100. Interest is estimated to be $10,000. Income taxes are estimated to be $216,000.
Prepare a budgeted multiple-step income statement for the year ending December 31, 2017.
Exercise 2
Lewis Company's standard labor cost of producing one unit of Product DO is 3.4 hours at the rate of $10.6 per hour. During August, 43,300 hours of labor are incurred at a cost of $10.75 per hour to produce 12,500 units of Product DD.
(a) Compute the total labor variance.
(b) Compute the labor price and quantity variances.
(c) Compute the labor price and quantity variances, assuming the standard Is 3.7 hours of direct labor at $10.95 per hour.