Income Statement

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 51,100 units will be produced, with the following total costs:

Direct materials	?
Direct labor	68,000
Variable overhead	15,000
Fixed overhead	195,000

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 Inventory	Work-in-Process Inventory
Beginning	$4,000	$12,900
Ending	$3,900	$14,900

Next year, Pietro expects to produce 51,100 units and sell 50,400 units at a price of $17.00 each. Beginning inventory of finished goods is $44,500, and ending inventory of finished goods is expected to be $36,000. Total selling expense is projected at $20,500, and total administrative expense is projected at $126,000.

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.

Note: due to rounding, percentages may not add down.

Pietro Frozen Foods, Inc.
Income Statement
For the Coming Year
			Percent
		$fill in the blank 7b00aa04e067000_2	fill in the blank 7b00aa04e067000_3%
		fill in the blank 7b00aa04e067000_5	fill in the blank 7b00aa04e067000_6%
		$fill in the blank 7b00aa04e067000_8	fill in the blank 7b00aa04e067000_9%
Less operating expenses:
	$fill in the blank 7b00aa04e067000_11
	fill in the blank 7b00aa04e067000_13	fill in the blank 7b00aa04e067000_14	fill in the blank 7b00aa04e067000_15%
		$fill in the blank 7b00aa04e067000_17	fill in the blank 7b00aa04e067000_18%

2. What if the cost of goods sold percentage for the past few years was 45.69 percent? Management's reaction might be: