Income Statement Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 49,800 units will be produced, with the following total costs: Direct materials Direct labor 51,000 Variable overhead 17,000 Fixed overhead 180,000 Next year, Pietro expects to purchase $126,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows: Work-in-Process Direct materials Inventory Inventory Beginning $4,000 $10,100 I Ending $3,900 $12,100 Next year, Pietro expects to produce 49,800 units and sell 49,100 units at a price of $18.00 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 $24,000, and total administrative expense is projected at $118,000. 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 Less operating expenses: 2. What if the cost of goods sold percentage for the past few years was 38.12 percent? Management's reaction might be: Further analyze sales reports Grant bonuses to production personnel Trim administrative staff Investigate production cost management