Income StatementPietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts that 47,700...Income...

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Accounting

Income Statement
Pietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts that 47,700 units will be produced, with thefollowing total costs:
Direct materials ?
Direct labor 58,000
Variable overhead 20,000
Fixed overhead 230,000
Next year, Pietro expects to purchase $122,000 of directmaterials. Projected beginning and ending inventories for directmaterials and work in process are as follows:
Direct materials
Inventory Work-in-Process
Inventory
Beginning $4,000 $10,300
Ending $3,900 $12,300
Next year, Pietro expects to produce 47,700 units and sell47,000 units at a price of $15.00 each. Beginning inventory offinished goods is $47,500, and ending inventory of finished goodsis expected to be $39,000. Total selling expense is projected at$29,000, and total administrative expense is projected at$110,500.
Required:
1. Prepare an income statement in good form.Round the percent to four decimal places before converting to apercentage. For example, .88349 would be rounded to .8835 andentered as 88.35.
Pietro Frozen Foods, Inc.
Income Statement
Forthe Coming Year
Percent
$ %
%
$ %
Less operating expenses:
$
%
$ %
2. What if the cost of goods soldpercentage for the past few years was 57.93 percent? Management'sreaction might be:

Answer & Explanation Solved by verified expert

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Note Schedule of Cost of Goods Manufactured Beginning Inventory of WIP 10300 Current cost f Manufacturing Beginning Inventory of RM 4000 Add Purchases 122000 Total cost of material available for use 126000 Less See Answer

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In: AccountingIncome StatementPietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts that 47,700...Income StatementPietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts that 47,700 units will be produced, with thefollowing total costs:Direct materials?Direct labor58,000Variable overhead20,000Fixed overhead230,000Next year, Pietro expects to purchase $122,000 of directmaterials. Projected beginning and ending inventories for directmaterials and work in process are as follows:Direct materialsInventoryWork-in-ProcessInventoryBeginning$4,000$10,300Ending$3,900$12,300Next year, Pietro expects to produce 47,700 units and sell47,000 units at a price of $15.00 each. Beginning inventory offinished goods is $47,500, and ending inventory of finished goodsis expected to be $39,000. Total selling expense is projected at$29,000, and total administrative expense is projected at$110,500.Required:1. Prepare an income statement in good form.Round the percent to four decimal places before converting to apercentage. For example, .88349 would be rounded to .8835 andentered as 88.35.Pietro Frozen Foods, Inc.Income StatementForthe Coming YearPercent$%%$%Less operating expenses:$%$%2. What if the cost of goods soldpercentage for the past few years was 57.93 percent? Management'sreaction might be:

Pietro Frozen Foods, Inc.
Income Statement
Forthe Coming Year
			Percent
		$	%
			%
		$	%
Less operating expenses:
	$
			%
		$	%

Direct materials	?
Direct labor	58,000
Variable overhead	20,000
Fixed overhead	230,000

	Direct materials Inventory	Work-in-Process Inventory
Beginning	$4,000	$10,300
Ending	$3,900	$12,300