NOP currently uses labor costs to allocate all overhead, but management is considering implementing an activity$-$based costing

system. After interviewing the sales and production staff, management decides to allocate administrative costs on the basis of direct

labor costs but to use the following bases to allocate the remaining costs:

Required:

a$.$ Prepare the product line income statement using the proposed activity bases.

c$.$ Restate the product line income statement for Normandy Office Products using direct labor costs as the only overhead allocation

base.NORMANDY OFFICE PRODUCTS

Income Statement

Manager Executive Total

Sales revenue $ $1,113,600$ $ $1,235,400$ $ $2,349,000$

Direct materials $197,200208,800406,000$