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EZ-Seat, Inc., manufactures two types of reclining chairs, Standard and Ergo. Ergo provides support for the body through a complex set of sensors and requires great care manufacturing to avoid damage to the material and frame. Standard is a conventional recliner, uses standard materials, and is simpler to manufacture. EZ-Seat's results for the last fiscal year are shown in the statement below. EZ-SEAT, INC. Income Statement 53,000.000 57 000,000 Direct labor Overhead s Quaity contro Operating proft EZ-Seat currently uses labor costs to allocate all overhead, but management is considering implementing an activity-based costing system. After interviewing the sales and production staff, management decides to allocate administrative costs on the basis direct labor costs but to use the following bases to allocate the remaining costs: Cost Driver Setting up Performing quality control 200 200 500 00 Required: a. Complete the income statement using the preceding activity bases. (Do not round 900,000 1,200,000 2 Direct materials Direct labor Administration 2015 Operating proft (loss) c. Restate the income statement for EZ-Seat using direct labor costs as the only overhead allocation base. (Do not round intermediate calculations.) Direct labor Operating prott poss) $ 1500000

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