obs Bistro produces party-sized hoagie sandwiches. For next year, Bobs Bistro predicts that 53,100 units will be produced with the following total costs:

Direct materials	?
Direct labor	$74,000
Variable overhead	15,000
Fixed overhead	215,000

Next year, Bobs Bistro expects to purchase $117,000 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

	Direct materials Inventory	Work-in-Process Inventory
Beginning	$7,000	$14,100
Ending	$6,900	$16,100

Next year, Bobs Bistro expects to produce 53,100 units and sell 52,400 units at a price of $15.00 each. Beginning inventory of finished goods is $39,500, and ending inventory of finished goods is expected to be $31,000. Total selling expense is projected at $23,500, and total administrative expense is projected at $100,000.

Required:

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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.

			Percent
Administrative expensesCost of goods soldGross marginSalesSelling expenses		$- Select -	- Select -%
Administrative expensesCost of goods soldGross marginOperating incomeSelling expenses		- Select -	- Select -%
Administrative expensesCost of goods soldGross marginOperating incomeSelling expenses		$- Select -	- Select -%
Less: Operating expenses
Cost of goods soldGross marginOperating incomeSalesSelling expenses	$- Select -
Administrative expensesCost of goods soldGross marginOperating incomeSales	- Select -	- Select -	- Select -%
Operating incomeOperating loss		$- Select -	- Select -%

Question Content Area

2. What if the operating expenses percentage for the past few years was 51.4 percent? Management's reaction might be:

Further analyze sales reportsGrant bonuses to production personnelTrim administrative staffInvestigate production cost management