Peppers Products manufactures and sells two types of chew toys for pets, Squeaky and Silent. In May, Peppers Products had the following costs and revenues:

Pepper's Products Income Statement
For the Month of May
	Squeaky			Silent			Total
Sales revenue	$	138,000		$	155,000		$	293,000
Direct materials		19,000			21,000			40,000
Direct labor		70,000			30,000			100,000
Overhead costs
Administration								20,000
Production setup								45,000
Quality control								19,200
Distribution								20,000
Operating profit							$	48,800

Peppers 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 Level
Activity	Cost Driver	Squeaky	Silent
Setting up	Number of production runs	10	20
Performing quality control	Number of inspections	40	40
Distribution	Number of units shipped	80,000	120,000

Required: a. Complete the income statement using the preceding activity bases. (Do not round intermediate calculations.) $ $ Squeaky $ 138,000 19,000 70,000 Silent 155,000 21,000 30,000 Total 293,000 40,000 100,000 Account Sales revenue Direct materials Direct labor Overhead costs: Administration Setting up Performing quality control Distribution Total overhead costs Operating profit (loss) 20,000 45,000 19,200 20,000 c. Restate the income statement for Pepper's Products using direct labor costs as the only overhead allocation base. (Do not round intermediate calculations.) $ $ Account Sales revenue Direct materials Direct labor Overhead costs Operating profit (loss) Squeaky $ 138,000 19,000 70,000 Silent 155,000 21,000 30,000 Total 293,000 40,000 100,000