Ez Seat, Inc, manufactures two types of reclining chairs, Standard and Ergo. Ergo provides support for the body through a complex set of sensors and requires great care in manufacturing to avoid damage to the material and frame Standard is a conventional recliner uses standard materials, and is simpler to manufacture. EZ-Seat's results for the last fiscal yeaf are shown in the following statement E2-SEAT, INC. Income Statement Ergo Standard Total Sales revenue $2,000,000 $5,000,000 $7,000,000 Direct materials 600,000 1,500,000 2,100,000 Direct labor 400,000 500,000 900,000 Overhead costs Administration 630,000 Production setup 496,000 Quality control 320,000 Distribution 693,000 Operating profit $1,861,000 EZ Seat currently uses labor costs to allocate all overhead, but management is considering implementing an activity based costing system After interviewing the sales and production staff , management decides to allocate administrative costs on the basis of direct labor costs but to use the following bases to allocate the remaining costs Activity level Activity base Cost Driver trgoStandard Setting up Number of production runs 60 Performing quality control Number of Inspections 200 Distribution Number of units shipped 1,500 6,200 100 200 Required: a. Complete the income statement using the preceding activity bases. c. Restate the income statement for EZ-Seat using direct labor costs as the only overhead allocation base. Complete this question by entering your answers in the tabs below. Required A Required Complete the income statement using the preceding activity bases. (Do not round intermediate calculations.) Account Ergo Standard Total Sales revenue $ 2,000,000 $ 5,000,000 $ 7,000,000 Direct materials $ 600.000 $ 1,500,000 $ 2.100,000 Direct labor 400,000 500.000 900.000 Overhead costs Administration 630.000 Production setup 496,000 Quality control 320,000 Distribution 693000 Total overhead costs Operating profit (loss)