Arena Corporation manufactures one product. It does not maintain any beginning or ending Work in Process 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. There is no variable manufacturing overhead.

The standard cost card for the company$$s only product is as follows:

Inputs Standard Quantity or Hours Standard Price or Rate Standard Cost

Direct materials $1\mathrm{.}2$ pounds $ $5\mathrm{.}50$ per pound $ $6\mathrm{.}60$

Direct labor $0\mathrm{.}90$ hours $ $21\mathrm{.}00$ per hour $18\mathrm{.}90$

Fixed manufacturing overhead $0\mathrm{.}90$ hours $ $4\mathrm{.}50$ per hour $4\mathrm{.}05$

Total standard cost per unit $ $29\mathrm{.}55$

The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $$81,000$ and budgeted activity of $18,000$ hours.

During the year, the company completed the following transactions:

Purchased $35,400$ pounds of raw material at a price of $$4\mathrm{.}60$ per pound.

Used $32,180$ pounds of the raw material to produce $26,900$ units of work in process.

Assigned direct labor costs to work in process. The direct labor workers $($who were paid in cash$)$ worked $23,810$ hours at an average cost of $$20\mathrm{.}60$ per hour.

Applied fixed overhead to the $26,900$ units in work in process inventory using the predetermined overhead rate multiplied by the number of direct labor$-$hours allowed. Actual fixed overhead costs for the year were $$67,800.$ Of this total, $$3,800$ related to items such as insurance, utilities, and indirect labor salaries that were all paid in cash and $$64,000$ related to depreciation of manufacturing equipment.

Completed and transferred $26,900$ units from work in process to finished goods.

Sold $($for cash$)27,100$ units to customers at a price of $$36\mathrm{.}60$ per unit.

Transferred the standard cost associated with the $27,100$ units sold from finished goods to cost of goods sold.

Paid $$149,000$ of selling and administrative expenses.

Closed all standard cost variances to cost of goods sold.

The company calculated the following variances for the year:

Materials price variance $ $31,860$ F

Materials quantity variance $ $550$ F

Labor rate variance $ $9,524$ F

Labor efficiency variance $ $8,400$ F

Fixed manufacturing overhead budget variance $ $13,200$ F

Fixed manufacturing overhead volume variance $ $27,945$ F

To answer the following questions, you will need to record transactions a through i in the worksheet below. This worksheet is similar to the worksheets in your text except that it has been split into two parts to fit on the page. PP&E $($net$)$ stands for Property, Plant, and Equipment net of depreciation.

Cash Raw Materials Work in Process Finished Goods PP&E $($net$)=$ Materials Price Variance Materials Quantity Variance Labor Rate Variance Labor Efficiency Variance FOH Budget Variance FOH Volume Variance Retained Earnings

$1/1$ $$1,200,000$ $$29,700$ $$0$ $$70,920$ $$505,400=$ $$0$ $$0$ $$0$ $$0$ $$0$ $$0$ $$1,806,020$

a$.=$

b$.=$

c$.=$

d$.=$

e$.=$

f$.=$

g$.=$

h$.=$

i$.=$

$12/31=$

The ending balance in the Cash account will be closest to: