Bob's Bistro produces party-sized hoagie sandwiches. For next year, Bob's Bistro predicts that 50,500 units will be produced with the following total costs: Direct materials ? Direct labor $66,000 Variable overhead 30,000 Fixed overhead 230,000 Next year, Bob's Bistro expects to purchase $128,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows: Direct materials Work-in-Process Inventory Inventory Beginning $4,000 $10,600 Ending $3,900 $12,600 Next year, Bob's Bistro expects to produce 50,500 units and sell 49,800 units at a price of $13.00 each. Beginning inventory of finished goods is $48,500, and ending inventory of finished goods is expected to be $40,000. Total selling expense is projected at $25,500, and total administrative expense is projected at $128,000. 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 Administrative expenses Administrative expenses Income Statement Cost of goods sold Cost of goods sold For the Coming Year Gross margin Gross margin Percent Sales Operating income % Selling expenses Selling expenses dol % % Administrative expenses Cost of goods sold Less: Operating expenses Cost of goods sold Gross margin Operating income Operating income Gross margin Operating income Sales Operating loss % Sales Selling expenses 2. What if the operating expenses percentage for the past few years was 69.22 percent? Management's reaction might be: Further analyze sales reports Grant bonuses to production personnel Trim administrative staff Investigate production cost management