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Income Statement Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 54,900 units...

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Accounting

Income Statement

Pietro Frozen Foods, Inc., produces frozen pizzas. For nextyear, Pietro predicts that 54,900 units will be produced, with thefollowing total costs:

Direct materials?
Direct labor62,000
Variable overhead22,000
Fixed overhead240,000

Next year, Pietro expects to purchase $126,500 of directmaterials. Projected beginning and ending inventories for directmaterials and work in process are as follows:

Direct materials
Inventory		Work-in-Process
Inventory
Beginning$7,000$13,500
Ending$6,900$15,500

Next year, Pietro expects to produce 54,900 units and sell54,200 units at a price of $18.00 each. Beginning inventory offinished goods is $38,500, and ending inventory of finished goodsis expected to be $30,000. Total selling expense is projected at$26,500, and total administrative expense is projected at$114,000.

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
For the Coming Year
Percent
$%
%
$%
Less operating expenses:
$
%
$%

2. What if the cost of goods soldpercentage for the past few years was 44.85 percent? Management'sreaction might be:

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