Normandy Office Products (NOP) makes two types of office desks, Manager and Executive. The Executive model is adjustable using electric motors and is made with upgraded materials. The manufacturing process for the Executive model is more complex than that for the Manager model, requiring more frequent inspections and shorter production runs. The Manager model is a basic desk, using good, but easy to work with, materials, and is simpler to manufacture. NOPs results for the last fiscal year are shown in the following statement.

NORMANDY OFFICE PRODUCTS
Income Statement
	Manager	Executive	Total
Sales revenue	$ 969,600	$ 1,075,650	$ 2,045,250
Direct materials	171,700	181,800	353,500
Direct labor	121,200	151,500	272,700
Overhead costs
Administration			218,160
Machine setup			363,600
Inspection			242,400
Packing and shipping			484,800
Operating profit			$ 110,090

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:

Activity	Cost Driver	Activity Level
		Manager	Executive
Machine setup	Number of production runs	200	100
Inspection	Number of inspections	200	400
Packing and shipping	Number of units shipped	12,000	3,000

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.