Using the information from BDS Enterprises, prepare the income statement to include all costs, but separate out uncontrollable costs. Insert subtotals where appropriate (include one for operating income) before the uncontrollable costs. Income tax expense should be based on all expenses. Calculate net income, profit margin, ROI, and RI, excluding uncontrollable expenses. Prepare a short response to accompany the income statement that explains why uncontrollable costs are separated in the income statement.

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Pretax income Gross profit Allocated costs (uncontrollable) Labor expense Sales Research and development (uncontrollable) Depreciation expense Net income/(loss) Cost of goods sold Selling expense Total expenses Marketing costs (uncontrollable) Administrative expense Income tax expense (21% of pretax income) Other expenses ? ? $2,035 41,580 189,000 315 17,000 ? 119,070 1,250 ? 790 690 ? 320