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    Dinkel Manufacturing Corporation - Variances & Income Stat.

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    Dinkel Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2008.
    Costs and Production Data Actual Standard
    Raw materials unit cost $2.70 $2.40
    Raw materials units used 10,650 10,040
    Direct labor payroll $147,186 $144,288
    Direct labor hours worked 14,430 15,030
    Manufacturing overhead incurred $184,900
    Manufacturing overhead applied $189,378
    Machine hours expected to be used at normal capacity 42,500
    Budgeted fixed overhead for June $51,000
    Variable overhead rate per hour $3.00
    Fixed overhead rate per hour $1.20
    Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The jobs were sold for $457,800. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used.

    Compute all of the variances for (1) direct materials and (2) direct labor.
    Total materials variance $
    Materials price variance $
    Materials quantity variance $
    Total labor variance $
    Labor price variance $
    Labor quantity variance $
    Compute the total overhead variance $

    Prepare an income statement for management. Ignore income taxes. (List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1. For negative numbers use either a negative sign preceding the number eg -45 or parentheses eg (45).)
    Income Statement
    For the Month Ended June 30, 2008

    Gross profit (at standard)

    Variances $

    Total variance -

    Gross profit (actual)

    Net income $

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    Solution Summary

    The solution computes Dinkel Manufacturing Corporation's - Variances (material & labor) & Income Statement