previous year is given $,$ along with a breakdown of the firm's cost of goods sold and operating expenses into their fixed and variable components.

a$.$ Use the percent$-$of$-$sales method to prepare a pro forma income statement for next year.

b$.$ Use fixed and variable cost data to develop a pro forma income statement for next year.

c$.$ Compare and contrast the statements developed in parts a$.$ and b$.$ Which statement probably provides the better estimate of income? Explain why.

a$.$ Use the percent$-$of$-$sales method to prepare a pro forma income statement for the year ended December $31,2020.$

Pro Forma Income Statement

Metroline Manufacturing, Inc.

for the Year Ended December $31,2020$

Data table

$($For Income Staement, click on the icon here ${?}_b$ in order to copy the contents of the data table below into a spreadsheet.$)$

$($For Breakdown of Costs and Expenses, click on the icon here in order to copy the contents of the data table below into

a spreadsheet.$)$