Bob's Bistro produces party-sized hoagie sandwiches. For next year, Bob's Bistro predicts that 55,600 units will be produced with the following total costs: Direct materials Direct labor Variable overhead Fixed overhead Next year, Bob's Bistro expects to purchase $129,000 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows: Direct materials ? Beginning Ending $71,000 19,000 215,000 Work-in-Process Inventory Inventory $5,000 $11,600 $4,900 $13,600 Next year, Bob's Bistro expects to produce 55,600 units and sell 54,900 units at a price of $14.00 each. Beginning inventory of finished goods is $39,500, and ending inventory of finished goods is expected to be $31,000. Total selling expense is projected at $28,000, and total administrative expense is projected at $100,500. Required: 1. Prepare an income statement in good form. Round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35. Bob's Bistro Income Statement For the Coming Year Sales Cost of goods sold Gross margin Less: Operating expenses Selling expenses. Administrative expense Operating income 28000 100500 Percent % % % 2. What if the operating expenses percentage for the past few years was 52.33 percent? Management's reaction might be: