Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Income Statement Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 48,800 units will be produced, with the following total costs:

Income Statement

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 48,800 units will be produced, with the following total costs:

Direct materials ?
Direct labor 63,000
Variable overhead 20,000
Fixed overhead 200,000

Next year, Pietro expects to purchase $116,000 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 $6,000 $13,200
Ending $5,900 $15,200

Next year, Pietro expects to produce 48,800 units and sell 48,100 units at a price of $14.00 each. Beginning inventory of finished goods is $39,500, and ending inventory of finished goods is expected to be $31,000. Total selling expense is projected at $25,000, and total administrative expense is projected at $115,500.

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
$ %
%
$ %
Less operating expenses:
$
%
$ %

2. What if the cost of goods sold percentage for the past few years was 57.23 percent? Management's reaction might be:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISE Managerial Accounting For Managers

Authors: Eric Noreen, Peter C. Brewer, Ray H. Garrison

5th Edition

1260570010, 9781260570014

More Books

Students also viewed these Accounting questions

Question

Identify the job expectancy rights of employees.

Answered: 1 week ago