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 $ $38\mathrm{.}85.$ During the year, the company produced and sold $28,200$ units at a price of $ $50\mathrm{.}10$ 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: Fixed manufacturing overhead budget variance $ $16,400$F Fixed manufacturing overhead volume variance $$21,560$ U Required: Prepare an income statement for the year.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:

The standard fixed manufacturing overhead rate was based on budgeted fixed manufacturing overhead of $$351,000$ and budgeted activity of $27,000$ hours.

During the year, the company completed the following transactions:

a$.$ Purchased $76,600$ gallons of raw material at a price of $$7\mathrm{.}90$ per gallon.

b$.$ Used $70,960$ gallons of the raw material to produce $20,900$ units of work in process.

c$.$ Assigned direct labor costs to work in process. The direct labor workers $($who were paid in cash$)$ worked $18,710$ hours at an average cost of $$19\mathrm{.}40$ per hour.

e$.$ Completed and transferred $20,900$ units from work in process to finished goods.

f$.$ Sold $($for cash$)17,700$ units to customers at a price of $$74\mathrm{.}30$ per unit.

g$.$ Transferred the standard cost associated with the $17,700$ units sold from finished goods to cost of goods sold.

h$.$ Paid $$93,000$ of selling and administrative expenses.

i$.$ Closed all standard cost variances to cost of goods sold.

The company calculated the following variances for the year:

Materials price variance

Materials quantity variance

Labor rate variance

Labor efficiency variance

Fixed manufacturing overhead budget variance

Fixed manufacturing overhead volume variance

$$68,940U$

$$700F$

$$1,871F$

$$1,950F$

$$16,400F$

$$106,470U$

parts to fit on the page. PP&E $($net$)$ stands for Property, Plant, and Equipment net of depreciation.

When the company closes its standard cost variances, the Cost of Goods Sold will increase $($decrease$)$ by: