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 $2,882,000 of fixed manufacturing overhead for an estimated allocation base of 288,200 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$720

Raw materials inventory170

Finished goods inventory290

Property, plant, and equipment, net8,700

Total assets$9,880

Liabilities and Equity

Retained earnings$9,880

Total liabilities and equity$9,880

The company's standard cost card for its only product is as follows:

Inputs (1)Standard Quantity or Hours (2)Standard Price or Rate Standard Cost(1) (2)

Direct materials 2 pounds $30.40per pound $60.80

Direct labor 3.00 hours $13.00per hour 39.00

Fixed manufacturing overhead3.00 hours $10.00per hour 30.00

Total standard cost per unit

Reg 1 Req 2 and 3 Reg 4 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 1 2 2 1 1 2 Labor efficiency variance Budget variance Volume variance Req 1 Req 2 and 3 Reg 4 (Unfavorable variances and decreases in balance sheet accounts should be entered with a minus sign. Enter your dollars in thousands rounded to the nearest thousand.) Wallis Company Transaction Analysis For the Year Ended 121310XX (dollars in thousands) Cash Raw Materials Work-in- Finished Goods Materials Price Materia Labor Fate Labor Fixed Fixed Process Variance Variance Overhead Overhes Retained Variance Variance Parlance Earnings 12/31 Complete this question by entering your answers in the tabs below. Req 1 Req 2 and 3 Reg 4 Prepare Wallis Company's income statement for the year. (Enter your dollars in thousands rounded to the nearest thousand.) Wallis Company Income Statement For the Year Ended 12/31/XX (dollars in thousands) Sales Cost of goods sold at standard Total variance adjustments Cost of goods sold at standard Gross margin Manufacturing overhead Net operating income