Wallis Company manufactures only one product and uses a standard cost system. The company uses a predetermined plantwide overhead rate that relies on direct labor-hours as the allocation base. All of the company's manufacturing overhead costs are fixed-it does not incur any variable manufacturing overhead costs. The predetermined overhead rate is based on a cost formula that estimated $2,899,000 of fixed manufacturing overhead for an estimated allocation base of 289,900 direct labor-hours. Wallis does not maintain any beginning or ending work in process inventory. The company's beginning balance sheet is as follows: Wallis Company Balance Sheet 1/1/XX (dollars in thousands) Assets $ Cash 850 Raw materials inventory Finished goods inventory Property, plant, and equipment, net 300 420 10,000 $11,570 Total assets Liabilities and Equity Retained earnings $11,570 $11,570 Total liabilities and equity The company's standard cost card for its only product is as follows: (1) Standard (2) Standard Price Standard Quantity or Hours 2 pounds Cost - (1) x (2) 66.00 45.00 Inputs Direct materials or Rate $ 33.00 per pound hour Direct labor Fixed manufacturing overhead $ 15.00 p 3.00 hours $ 10.00 per hour 3.00 hours 30.00 $141.00 Total standard cost per unit During the year Wallis completed the following transactions: a. Purchased (with cash) 237,500 pounds of raw material at a price of $31.00 per pound. b.Added 218750 pounds of raw material to work in process to produce 96,500 units. c. Assigned direct labor costs to work in process. The direct laborers (who were paid in cash) worked 248,000 hours at an average cost of $16.00 per hour to manufacture 96,500 units. d. Applied fixed overhead to work in process inventory using the predetermined overhead rate multiplied by the number of direct labor-hours allowed to manufacture 96,500 units. Actual fixed overhead costs for the year were $2,747,500. Of this total, $1,355,000 related to items such as insurance, utilities, and salaried indirect laborers that were all paid in cash and $1,392,500 related to depreciation of equipment. e. Transferred 96,500 units from work in process to finished goods. f. Sold (for cash) 93,500 units to customers at a price of $170 per unit. g. Transferred the standard cost associated with the 93,500 units sold from finished goods to cost of goods sold. h.Paid $2,127,500 of selling and administrative expenses. i. Closed all standard cost variances to cost of goods sold. Required: 1. Compute all direct materials, direct labor, and fixed overhead variances for the year. 2. Record transactions a through /for Wallis Company. 3. Compute the ending balances for Wallis Company's balance sheet. 4. Prepare Wallis Company's income statement for the year. Req 4 Req 1 Req 2 and 3 Compute all direct materials, direct labor, and fixed overhead variances for the year. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance Budget variance Volume variance Rea 2 and 3 Req 1 Req 4 Record transactions a through I for Wallis Company. Compute the ending balances for Wallis Company's balance sheet. (Unfavorable variances and deecreases in balance sheet accounts should be entered with a minus sign. Enter your dollars in thousands.) Wallis Company Transaction Analysis For the Year Ended 12/31/XX (dollars in thousands) Fixed Overhead Fixed Overhead Material Quantity Variance Labor Materials Price Variance Work-in- Finished Goods PP&E Labor Rate Variance Retained Cash Raw Materials Efficiency Variance (net) Earnings Process e a6png 1/1 a. b e. f. g. h. 12/31 Req 2 and 3 Req 4 Req 1 Prepare Wallis Company's income statement for the year. (Enter your dollars in thousands. Round your answers to the nearest whole dollar amount.) Wallis Company Income Statement For the Year Ended 12/31/XX (dollars in thousands) Total variance adjustments