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Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the

Forsyth Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. During the year, the company produced and sold 10,000 units at a price of $152 per unit. Its standard cost per unit produced is $122 and its selling and administrative expenses totaled $243,500. Forsyth does not have any variable manufacturing overhead costs and it recorded the following variances during the year:

Materials price variance $ 8,200 F
Materials quantity variance $ 11,900 U
Labor rate variance $ 5,200 U
Labor efficiency variance $ 6,100 F
Fixed overhead budget variance $ 4,200 F
Fixed overhead volume variance $ 13,700 F

Required:

1. When Forsyth closes its standard cost variances, the cost of goods sold will increase (decrease) by how much?

2. Prepare an income statement for the year.

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