Income Statement Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 48,600 units will be produced, with the following total costs: Direct materials Direct labor 70,000 Variable overhead 18,000 Fixed overhead 210,000 Next year, Pietro expects to purchase $123,500 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 $7,000 $13,500 Ending $6,900 $15,500 Next year, Pietro expects to produce 48,600 units and sell 47,900 units at a price of $17.00 each. Beginning inventory of finished goods is $42,500, and ending inventory of finished goods is expected to be $34,000. 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. Income Statement For the Coming Year Percent Sales % Cost of goods sold % Gross margin % Less operating expenses: Selling expenses Administrative expenses % Operating income % 2. What if the cost of goods sold percentage for the past few years was 47.57 percent? Management's reaction might be: Investigate production cost management