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 Sales revenue Direct materials Direct labor Overhead costs Administration Production setup Quality control Distribution Operating profit Squeaky $43,200 4,000 9,600 Silent $48,000 4,000 14,400 Total $91,200 8,000 24,000 6,000 12,000 6,000 4,800 $30,400 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 Required: Activity Level Squeaky Silent 10 5 30 16,000 10 24,000 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 Sales revenue Direct materials Direct labor Overhead costs: Squeaky Silent Total $ 43,200 $ 4,000 48,000 $ 4,000 91,200 8,000 9,600 14,400 24,000 Administration 6,000 Setting up Performing quality control 12,000 6,000 Distribution 4,800 Total overhead costs 0 Operating profit (loss) 29,600 $ 29,600 $ 59,200 Required A Required C >