Exercise 10B-2 Standard Cost Flows; Income Statement Preparation (LO10-5] Swain Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. The company's beginning balance in Retained Earnings is $66,000. It sells one product for $169 per unit and it generated total sales during the period of $598,260 while incurring selling and administrative expenses of $54,400. Swain Company does not have any variable manufacturing overhead costs and its standard cost card for its only product is as follows: (2) Standard Price or Rate (1) Standard Quantity or Hours 6.0 pounds 3.0 hours 3.0 hours Direct materials Direct labor Fixed manufacturing overhead Total standard cost per unit $ 8 per pound $ 12 per hour $ 20 per hour Standard Cost (1) x (2) $ 48 36 60 $ 144 During the period, Swain recorded the following variances: Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance Fixed overhead budget variance Fixed overhead volume variance $3,500 U $ 9,200 F $4,000 U $6,700 U $1,400 U $5,900 F Required: 1. When Swain closes its standard cost variances, the cost of goods sold will increase (decrease) by how much? 2. Prepare an income statement for the year. 3. What is Swain's ending balance in Retained Earnings? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 When Swain closes its standard cost variances, the cost of goods sold will increase (decrease) by how much? The cost of goods sold will by Required 1 Required 2 Required 3 Prepare an income statement for the year. Swain Company Income Statement For the Year Total variance adjustments Required 1 Required 2 Required 3 What is Swain's ending balance in Retained Earnings? Ending balance in retained earnings