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 $2,894,000 of fixed manufacturing overhead for an estimated allocation base of 289,400 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 Raw materials inventory Finished goods inventory Property, plant, and equipment, net Total assets Liabilities and Equity Retained earnings Total liabilities and equity $ 840 290 410 9,900 $ 11,440 $ 11,440 $ 11,440 The company's standard cost card for its only product is as follows: Inputs Direct materials Direct labor Total standard cost per unit Fixed manufacturing overhead (1) Standard Quantity or Hours 2 pounds 3.00 hours 3.00 hours (2) Standard Price or Rate $32.80 per pound $ 13.00 per hour $ 10.00 per hour Standard Cost (1) x (2) $ 65.60 39.00 30.00 $ 134.60