Flimsy Play Photography offers two types of products, Deluxe Portraits and Regular Portraits. Last year, Flimsy Play had the following revenues and costs:

	Deluxe	Regular	Total
Revenue	$170,000	$190,000	$360,000
Direct materials	$22,000	$22,000	$44,000
Direct labor	$86,000	$55,000	$141,000
Indirect costs:
Administration			$24,000
Production setup			$59,000
Quality control			$24,000
Marketing			$17,000
Operating income			$51,000

Flimsy Play 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 and to use the following bases to allocate the remaining overhead:

		Cost Driver Units
Activity	Cost Driver	Deluxe	Regular
Production setup	Photo sessions	140	240
Quality control	Customer inspections	270	190
Marketing	Advertisements	56	47

Required:

A. Prepare the income statement using the activity bases indicated for the allocation of the indirect costs to the two products.

B. Prepare the income statement for Flimsy Play using direct labor costs as the only overhead allocation base.