Income Statement Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 54,500 units will be produced, with the following total costs: Direct materials 2 Direct labor 74,000 Variable overhead 26,000 Fixed overhead 240,000 Next year, Pietro expects to purchase $122,000 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 $6,000 $14,800 Ending $5.900 $16,800 Next year, Pietro expects to produce 54,500 units and sell 53,800 units at a price of $18.00 each. Beginning inventory of finished goods is $41,500, and ending inventory of finished goods is expected to be $33,000. Total selling expense is projected at $25,000, and total administrative expense is projected at $127,500 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.5835 and entere as 88.35 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 38.35 Pletro Frozen Foods, Inc. Income Statement For the Coming Year Percent Sales 968.000 100 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 46.39 percent? Management's reaction might be