Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 53,800 units will be produced, with the following total costs: Direct materials Direct labor 53.000 Variable overhead 23.000 Fixed overhead 185.000 Next year, Pietro expects to purchase $124,500 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows: Direct materials Work-in-Process Inventory Inventory Beginning $4.000 S12,200 Ending $3.900 S14,200 Next year, Pietro expects to produce 53,800 units and sell 53,100 units at a price of $18.00 each. Beginning inventory of finished goods is $38.500, and ending inventory of finished goods is expected to he $30,000. Total selling expense is projected at $24,000, and total administrative expense is projected at $123,500, 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. Pietro Frozen Foods, Inc. Income Statement For the Coming Year Percent Less operating expenses: 2. What if the cost of youds sold percentage for the past few years was 37.02 percent? Management's reaction might be