Pepper's Products manufactures and sells two types of chew toys for pets, Squeaky and Silent. In May, Pepper's Products had the following costs and revenues Pepper's Products Income Statement For the Month of May Squeaky $43,200 Silent $48,000 4,000 14,400 Total $91,200 8,000 24,000 Sales revenue Direct materials Direct labor Overhead costs 4,000 9,600 6,000 12,000 6,000 4,800 S30,400 Administration Production setup Quality control Operating profit 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 Level Activity Setting up Performing quality control Distribution Cost Driver Squeaky Silent Number of production runs Number of inspections Number of units shipped 10 30 10 16,000 24,000 Required a. Complete the income statement using the preceding activity bases. (Do not round intermediate calculations.) Total Account Squeaky Silent Sales revenue Direct materials Direct labor Overhead costs $ 43,200$ 48,000S 91,200 4,000 14,400 4,000 9,600 8,000 24,000 Administration Setting up Perform Distribution 6,000 12,000 6,000 4,800 0 ing quality control Total overhead costs $ 29,60029,600 59,200 Operating profit (loss) c. Restate the income statement for Pepper's Products using direct labor costs as the only overhead allocation base. (Do not round intermediate calculations.) Total Account SqueakySilent $43,200 S 48,000 S 91,200 8,000 4,400 24,000 Sales revenue Direct materials Direct labor 4,000 9,600 4,0008, Overhead costs Operating profit (loss) 29,600 S 29,600 S 59,200