Pepper's Products Income Statement For the Month of May Squeaky Silent $139,000 $152,000 22,000 19,000 80,000 20,000 Total $291,000 41,000 100,000 Sales revenue Direct materials Direct labor Overhead costs Administration Production setup Quality control Distribution Operating profit 20,000 64,000 19, 200 22,000 $ 24,800 Pepper's Products currently uses labor costs to allocate all overhead but 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 overhead. Activity Setting up Performing quality control Distribution Cost Driver Number of production runs Number of inspections Number of units shipped Activity Level Squeaky Silent 10 22 40 40 90,000 130,000 Required: a. Complete the income statement using the preceding activity bases. c. Restate the income statement for Pepper's Products using direct labor costs as the only overhead allocation base. Complete this question by entering your answers in the tabs below. Required A Required C Complete the income statement using the preceding activity bases. (Do not round intermediate calculations. Input all amounts as positive values.) Account Total Sales revenue $ $ Squeaky $ 139,000 22,000 80,000 Silent 152,000 19,000 20,000 291,000 41,000 Direct materials Direct labor 100,000 Overhead costs: 20,000 64,000 19,200 Administration Setting up Performing quality control Distribution Total overhead costs Operating profit (loss) 22,000 0 $ 37,000 $ 113,000 $ 150,000