Xenon Company has established the following standards for the production of its
finished units:
	Direct Materials (8 oz. per unit @ $4.00 per oz.)					$ 32.00
	Direct Labor (5 dl hrs per unit @ $18 per dl hr)					90.00
	Variable OH (9 machine hrs per unit @ $10 per machine hr)					90.00
	Fixed OH (9 machine hrs per unit @ $6 per machine hr*)					54.00
	Total Standard Cost of one Finished Unit					$ 266.00
	(*the fixed overhead rate was based on a budgeted production level of 20,000 units)
Actual production for the period was 18,000 units. 200,000 ounces of material were
purchased on account for $4.25 per ounce. 140,000 ounces of materials were used in
production. 92,000 direct labor hours were incurred and the actual labor rate paid was
$18.10 per hour. 175,000 actual machine hours were incurred. The actual variable
overhead costs incurred were $1,650,000 and the actual fixed overhead costs incurred
were $1,100,000. 16,000 units were sold during the period for $500 per unit cash.
Instructions
(a)	Compute the eight production variances.
(b)	Prepare the standard costing journal entries to record all of the transactions for the
	period including the closing of the variance accounts.
(c)	What amount of gross profit would be reported on the income statement?