Pickle Motorcycles, Inc. (PMI), manufactures three motorcycle models: a cruising bike (Route 66), a street bike (Main Street), and a starter model (Alley Cat). Because of the different materials used, production processes for each model differ significantly in terms of machine types and time requirements. Once parts are produced, however, assembly time per unit required for each type of bike is similar. For this reason, PMI allocates overhead on the basis of machine-hours. Last year, the company shipped 1,000 Route 66s, 4,000 Main Streets, and 10,000 Alley Cats and had the following revenues and expenses:

PICKLE MOTORCYCLES, INC. Income Statement
	Route 66			Main Street			Alley Cat			Total
Sales revenue	$	7,600,000		$	11,200,000		$	9,500,000		$	28,300,000
Direct costs
Direct materials		3,000,000			4,800,000			4,000,000			11,800,000
Direct labor		288,000			480,000			1,080,000			1,848,000
Variable overhead
Machine setup											468,000
Order processing											1,152,000
Warehousing costs											1,674,000
Energy to run machines											756,000
Shipping											648,000
Contribution margin										$	9,954,000
Fixed overhead
Plant administration											1,760,000
Other fixed overhead											2,800,000
Gross profit										$	5,394,000

Using machine-hours to allocate production overhead, complete the income statement for Pickle Motorcycles. (See the "using energy" activity for machine-hours.) Do not attempt to allocate plant administration or other fixed overhead. (Do not round intermediate calculations.)

Complete the income statement using the bases recommended by the consultant. (Do not round intermediate calculations.)

PICKLE MOTORCYCLES Income Statement Main Street Alley Cat Route 66 Total 7.600.000 11.200.000 9,500,000 28.300.000 Sales revenue Direct costs 3,000,000 4.800.000 4,000,000 11,800,000 Direct material 480,000 1,080,000 1.848,000 288,000 Direct labor 0 Variable overhead Contribution margin S 4,312,000 S 5,920,000 S 4,420,000 S 9,954,000 Fixed overhead: 1,760,000 Plant administration 2,800,000 Other fixed overhead Gross profit 5,394,000