Grafton Corporation Manufactures One Product

Essay

Grafton Corporation manufactures one product. It does not maintain any beginning or ending inventories. The company uses a standard cost system in which inventories are recorded at their standard costs and any variances are closed directly to Cost of Goods Sold. Its standard cost per unit produced is $38.85. During the year, the company produced and sold 28,200 units at a price of $50.10 per unit and its selling and administrative expenses totaled $120,000. The company does not have any variable manufacturing overhead costs. It recorded the following variances during the year:
Required:Prepare an income statement for the year.