Income Statement 7 Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 49,300 units will be produced, with the following total costs: Direct materials Direct labor 65,000 Variable overhead 22,000 Fixed overhead 190,000 Next year, Pietro expects to purchase $124,000 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 $7,000 $14,700 Ending $6,900 $16,700 Next year, Pietro expects to produce 49,300 units and sell 48,600 units at a price of $13.00 each. Beginning inventory of finished goods is $38,500, and ending inventory of finished goods is expected to be $30,000. Total selling expense is projected at $27,500, and total administrative expense is projected at $121,000. Next year, Pietro expects to produce 49,300 units and sell 48,600 units at a price of $13.00 each. Beginning inventory of finished goods is $38,500, and ending inventory of finished goods is expected to be $30,000. Total selling expense is projected at $27,500, and total administrative expense is projected at $121,000. 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. Pietro Frozen Foods, Inc. 1 Income Statement For the Coming Year Percent % Less operating expenses: 2. What if the cost of goods sold percentage for the past few years was 59.51 percent? Management's reaction might be