I think the way WIP Variance is used normally is as an expense account;  if this is the way your account is set up (as an "E" type)  it should be on your income statement and should not be on your balance sheet.  
 
If it is an asset account and it is showing up on the income statement,  you may have it included it in the range of accounts normally used as expense accounts, but you have made it an asset.  
On the default income statement, this would happen if you made and account in the normal expense range (500--'s) an asset account.  Conversely, it will not show up on the balance sheet because the normal range of assets in in the 100--'s.  
To use an account out of the normal range as a different type, you need to do a custom statement for both income and balance sheet.
 

What is your account number?  What type of account is it (AM-A)?
 
PS If it is an expense account is it "Cash" or "non-cash" ?
 
 

Sorry, yes I meant GL-A-- the WIP Variance account.  What income account are you talking about?

Yes the income account is coming from the income statement-  it is the net income aka Retained Earnings.
What is the account type for your account 50125?  What is the other WIP variance account number and type?

Actually your balance sheet is probably right but your income statement is off because it is reporting the 50125 account in the COGS when you have it typed as an asset.  
 
WIP variance is really an expense.  It is either the difference between actual costs and standard cost if you finish production at standard cost, or it is (as in our case) costs added to the work order after finishing production at actual cost.  WIP as an asset on the other hand is costs of Work In Process that is not finished.  That must be what your other account 11310 is?
 
I am not sure why you have WIP variance as an asset , but in order for it not to report on the Income Statement you need to have it as a number outside all of your other expenses.  The standard  forms only allow two ranges for COGS and your WIP variance as an asset probably falls with in those ranges.  
 
   
 
Take a look at the Standard Income Statement Format in AM-E.  See if your 50125 is included in the account ranges for this report.

Sounds like you have it incorrectly designated.  Number 50125 (in your numbering convention) looks like it should be an Expense but you seem to have it set in AM-C as A (Asset).  You need to change the type in AM-C from A to E for Expense.

So both WIP Variances, 11320 & 50125, are under the A for Asset in Chart of Accounts.  Except all of our asset GL codes fall in the 10000's and the 2nd WIP Variance is 50125 which is expense account numbers 50000; however the expense GL does not show the 50125, Asset does.  Does that mess with the reporting on the Balance Sheet?  If so than how do I change the 50125 to a 10000 style account?  
 
Am I making sense??