MTI makes three types of lawn tractors: M3100. M4100, and M6100. In the past, it allocated overhead to products using machine-hours. Last year, the company produced 9,000 units of M3100, 19,000 units of M4100, and 9,000 units of M6100 and had the following revenues and costs: MTI Income Statement M3100 M4100 $ 8,900,000 $ 14,000,000 M6100 $ 14,500,000 Total $ 37,400,000 2,700,000 590,000 4,500.000 890,000 3,100,000 1,720,000 10,300,000 3,200,000 Sales revenue Direct costs Direct materials Direct labor Variable overhead Setting up machines Processing sales orders Warehousing Operating machines Shipping Contribution margin Plant administration Gross profit 2,400,000 1,680,000 2,340,000 1,250,000 851,000 15,379,000 6.100,000 9,279,000 $ $ MTI's controller has heard about activity-based costing and puts together an employee team to recommend cost allocation bases. The employee team recommends the following: Activity Setting up machines Processing sales orders Warehousing Operating machines Shipping Cost Driver Production runs Sales orders received Units held in Inventory Machine-hours Units shipped M3100 9 170 110 6,500 9,000 M4100 20 430 180 8,800 19,000 M6100 21 200 100 9,700 9.000 The employee team recommends that plant administration costs not be allocated to products. Required: a. Using machine-hours to allocate overhead, complete the income statement for MTI. Do not allocate plant administrative costs to products. (Do not round intermediate calculations.) MTI Income Statement M3100 M4100 $ S 8,900.000 14,000,000 Total M6100 $ 14,500,000 Sales revenue $37.400,000 Direct costs: Direct material 2,700,000 4,500,000 890,000 3,100,000 1,720,000 10,300,000 3,200,000 Direct labor 590,000 Variable overhead Contribution margin Plant administration Gross profit 6,100,000 b. Complete the income statement using the activity-based costing method suggested by the employee team. Unit Rate per run per order Activity Setting up machines Processing sales orders Warehousing Operating machines Shipping per unit per machine-hr. per unit shipped MTI Income Statement M3100 M4100 M6100 Total Sales revenue $ 8,900,000 $ 14,000,000 $14,500,000 $37,400,000 Direct costs: Direct material 2,700,000 590,000 4,500,000 890,000 3,100,000 1,720,000 10,300,000 3,200,000 Direct labor Variable overhead Setting up machines Processing orders Warehousing Operating machines Shipping Contribution margin Plant administration 2,400,000 1,680,000 2,340,000 1,250,000 851,000 6,100,000 Gross profit