Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 47,900 units will be produced, with the following total costs:

Direct materials	?
Direct labor	61,000
Variable overhead	17,000
Fixed overhead	230,000

Next year, Pietro expects to purchase $115,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:

	Direct materials Inventory	Work-in-Process Inventory
Beginning	$6,000	$15,000
Ending	$5,900	$17,000

Next year, Pietro expects to produce 47,900 units and sell 47,200 units at a price of $17.00 each. Beginning inventory of finished goods is $46,500, and ending inventory of finished goods is expected to be $38,000. Total selling expense is projected at $20,500, and total administrative expense is projected at $126,500.

Required:

1. Prepare an income statement in good form. Round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35.

Note: due to rounding, percentages may not add down.

Pietro Frozen Foods, Inc.
Income Statement
For the Coming Year
			Percent
		$fill in the blank dd75a8f5ffccfc2_2	fill in the blank dd75a8f5ffccfc2_3%
		fill in the blank dd75a8f5ffccfc2_5	fill in the blank dd75a8f5ffccfc2_6%
		$fill in the blank dd75a8f5ffccfc2_8	fill in the blank dd75a8f5ffccfc2_9%
Less operating expenses:
	$fill in the blank dd75a8f5ffccfc2_11
	fill in the blank dd75a8f5ffccfc2_13	fill in the blank dd75a8f5ffccfc2_14	fill in the blank dd75a8f5ffccfc2_15%
		$fill in the blank dd75a8f5ffccfc2_17	fill in the blank dd75a8f5ffccfc2_18%

2. What if the cost of goods sold percentage for the past few years was 48.60 percent? Management's reaction might be: