Pickle Motorcycles, Inc. (PMI), manufactures three motorcycle modela cruising bike Route 66,5 street bike (Main Street, and a starter model (Alley Cat. Because of the different materials used production processes for esch model differ significantly in terms of machine types and time requirements. Once parts are produced, however, ssembly time per unit required for each type of bikes similar. For this resson. PMI allocates overhead on the basis of machine-hours. Last yes, the company shipped u00 Route 66. 2.200 Main Streets, and 4600 Alley Cats and had the following revenues and expenses. PICKLE FOTORCYCLES, INC. Income Statement Route 66 Main Street Alley Cat Total Sales en $7,180,000 $10,480,00 $ 9,388, cee $ 25,000,000 Direct costs Direct isterials 2,900,000 4,500,00 4,480,000 11,000 Direct labor 295,600 487. 1,678,000 1,853,000 Variable overload Machine 55a.ee Order processing 1,350,000 1,771,680 Energy to run machines 850,00 Shipping 588,888 Contribution margin S 8,228,888 Fixed overhead Planit adinistration 1,729,60 Other Fixed overhead 2.720.00 Gross profit $ 3,588,888 housing costs PMIS chief financial officer (CFO) hired a consultant to recommend cost allocation bases. The consultant recommended the foowing Activity Love! Activity Cost Driver Route 66 Main Street Alley Cat Setting up machines Neber of production runs 25 35 Processing orders Mueber of sales orders received 480 680 780 Number of its held in Inventory 150 210 40 using energy Machine-hours 12,000 16,000 22,600 Shipping Number of units shipped 1,000 3,700 10,000 The consultant found no basis for allocating the plant solministration and other fixed overhead costs and recommended that these not be applied to products. Required: a. Using machine-hours to allocate production overhead, complete the income statement for Pickle Motorcycles. (See the using energy sctivity for machine-hours.) Do not attempt to allocate plant administration or other fixed overness b. Complete the income statement using the bases recommended by the consultant c. How might activity-based costing result in better decisions by Pic de Motorcycle's management? Complete this question by entering your answers in the tabs below. Required Required Required Using machine-hours to allocate production overhead, complete the income statement for Pidde Motorcycles. (See the using energy activity for machine-hours.) Do not attempt to allocate plant administration or other fixed overhead (Round your variable overhead rate to 2 decimal places and your final answers to the nearest whole dollar amount. Input all amounts as positive values.) PICKLE MOTORCYCLES Income Statement Route Main front 7,100.000 S 10.400,000 Total Alley Cat 9,300.000 $ $ S 26.800,000 4,500,000 2,900.000 296.000 4,400.000 1,070.000 11,800,000 1,853,000 487,000 Sales noves Direct costs: Direct material Direct labor Variable overhead Contribution margin Find over Plant administration Other ind overhead Gross profit 1.720,000 2.720,000 3.588,000 $ Required A Required B > Complete this question by entering your answers in the tabs below. Required A Required B Required Complete the income statement using the bones recommended by the consultant. (Do nat round Intermediate calculations. Input all amounts as positive values. PICKLE MOTORCYCLES Income Statement Route Main Street Back Alley Total Sales revenue $ 7,100,000 $10,400,000 $ 9,200,000 $25,800,000 Direct costs: Direct material 2.900,000 4,500,000 4,200,000 11,800,000 Direct labor 296,000 487.000 1,070,000 1.858.000 Variable overhead Machine setup 560.000 Order processing 1,360,000 Warehousing coats 1,771,000 Energy to nun machines 850,000 Shipping 588.000 Contribution margin Fond overhead Plant administration 1,720.000 Other fud overhead 2,720.0001 Gross profit $ 3,588.000 Complete this question by entering your answers in the tabs below. Required Poquired B Required How might activity-based costing result in better decisions by Pickle Motorcycles's management? The activity-based cosing method provides a more detailed breakdown at the costs The activity-based costing method provides a consolidated summary of the costs