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GoGo Ltd. manufactures three models of children's swing sets: Standard, Deluxe, and Super. The Standard set is made of steel, the Deluxe set is made of aluminum, and the Super set is made of a titaniumaluminum alloy. Because of the different materials used, production requirements differ signicantly across models in terms of machine types and time requirements. However, once the parts are produced, assembly time per set is similar for the three models. For this reason, GoGo has adopted the practice of allocating overhead costs on the basis of machine hours. Last year, the company produced 5,000 Standard sets, 500 Deluxe sets, and 2,000 Super sets. The company had the following revenues and expenses for the year: GOGO LTD. Income Statement Year Ended December 31, 2020 Sales $475,000 $380,000 $560,000 $1,415,000 Direct costs: Direct materials 200,000 150,000 240,000 590,000 Direct labour 54,000 14,000 24,000 92,000 Variable overhead costs: Machine set-ups 7 7 7 24,700 Order processing 7 ? 7 61,250 Warehouse 7 ? 7 90,000 Shipping 7 ? 7 31,920 Contribution margin 7 ? 7 525,130 Fixed overhead costs: Plant administration 88,550 Other 182,840 Gross profit $253,740 The chief nancial officer of GoGo has hired a consultant to recommend cost allocation bases. The consultant has recommended the following: Machine set-ups No. of production runs 25 17 23 65 Sales order processing No. of sales orders received 320 235 320 875 Warehouse costs No. of units held in inventory 205 135 110 450 Shipping No. of units shipped 5,360 580 2,040 7,980 The consultant found no basis for allocating the plant administration and other fixed overhead costs, and recommended that they not be applied to products. (a) Complete the income statement using the bases recommended by the consultant. Do not allocate any xed overhead costs. (Round overhead rates to 3 decimal places. e.g. 25.225 and final answers to a decimal places, e.g. 1525.) 6060 LTD. Income Statement Year Ended December 31, 2020 Sales Direct costs: Direct materials Direct labour Variable overhead costs: Machine set-ups Order processing Warehouse Shipping Contribution margin Fixed overhead costs: Plant administration Other Gross profit $475,000 $380,000 200,000 150,000 54,000 14,000 $ $ $560,000 240,0 00 24,000 $1,415,000 590,000 92,000 24,700 61,250 90,000 31,920 525,130 88,550 182,840 $253,740