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 800 Route 66s, 1,900 Main Streets, and 5,000 Alley Cats and had the following revenues and expenses:

PICKLE MOTORCYCLES, INC. Income Statement
	Route 66			Main Street			Alley Cat			Total
Sales revenue	$	8,100,000		$	11,100,000		$	9,700,000		$	28,900,000
Direct costs
Direct materials		3,400,000			5,100,000			3,800,000			12,300,000
Direct labor		284,000			488,000			1,080,000			1,852,000
Variable overhead
Machine setup											475,000
Order processing											1,120,000
Warehousing costs											1,957,500
Energy to run machines											850,000
Shipping											860,000
Contribution margin										$	9,485,500
Fixed overhead
Plant administration											1,800,000
Other fixed overhead											2,830,000
Gross profit										$	4,855,500

PMI's chief financial officer (CFO) hired a consultant to recommend cost allocation bases. The consultant recommended the following:

		Activity Level
Activity	Cost Driver	Route 66		Main Street		Alley Cat
Setting up machines	Number of production runs	20		35		40
Processing orders	Number of sales orders received	400		500		700
Warehousing	Number of units held in inventory	220		250		400
Using energy	Machine-hours	10,000		14,000		26,000
Shipping	Number of units shipped	900		4,300		12,000

The consultant found no basis for allocating the plant administration 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" 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.)

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