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 fixedit does not incur any variable manufacturing overhead costs. The predetermined overhead rate is based on a cost formula that estimated $2,919,000 of fixed manufacturing overhead for an estimated allocation base of 291,900 direct labor-hours. Wallis does not maintain any beginning or ending work in process inventory.

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 fixedit does not incur any variable manufacturing overhead costs. The predetermined overhead rate is based on a cost formula that estimated $2,919,000 of fixed manufacturing overhead for an estimated allocation base of 291,900 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 $ 890 Raw materials inventory 340 Finished goods inventory 460 Property, plant, and equipment, net 10,400 Total assets $12,090 Liabilities and Equity Retained earnings $12,090 Total liabilities and equity $12,090 The company's standard cost card for its only product is as follows: Inputs Direct materials (1) (2) Standard Standard Quantity Price or Hours or Rate per 2 pounds $33.80 pound 3.00 $14.00 per hour hours 3.00 hours $10.00 per hour Standard Cost (1) (2) $ 67.60 Direct labor 42.00 30.00 Fixed manufacturing overhead Total standard cost per unit $139.60 During the year Wallis completed the following transactions: a. Purchased (with cash) 239,500 pounds of raw material at a price of $31.40 per pound. b. Added 219,750 pounds of raw material to work in process to produce 96,900 units. C. Assigned direct labor costs to work in process. The direct laborers (who were paid in cash) worked 248,800 hours at an average cost of $16.00 per hour to manufacture 96,900 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 96,900 units. Actual fixed overhead costs for the year were $2,749,500. Of this total, $1,359,000 related to items such as insurance, utilities, and salaried indirect laborers that were all paid in cash and $1,390,500 related to depreciation of equipment. e. Transferred 96,900 units from work in process to finished goods. f. Sold (for cash) 93,900 units to customers at a price of $170 per unit. g. Transferred the standard cost associated with the 93,900 units sold from finished goods to cost of goods sold. h. Paid $2,129,500 of selling and administrative expenses. i. Closed all standard cost variances to cost of goods sold. Req 1 Req 2 and 3 Req 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 Labor efficiency variance Budget variance Volume variance Reg 1 Req 2 and 3 Reg 4 Record transactions a through i for Wallis Company. Compute the ending balances for Wallis Company's balance sheet. (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.) Show less Wallis Company Transaction Analysis For the Year Ended 12/31/XX (dollars in thousands) Material Materials Price Quantity Variance Variance Cash Raw Materials Work-in- Process Finished Goods PP&E (net) Labor Rate Variance Labor Efficiency Variance Fixed Overhead Budget Variance Fixed Overhead Volume Variance Retained Earnings 1/1 a. b. c. d. e. f. g. h. i. 12/31 Req 1 Reg 2 and 3 Req 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) Total variance adjustments 0 $ 0