Score: 0.18 of 15 pts 2 of 2 (1 complete) HW Score: 49.03%, 14.71 of 30 pts & P4-16 (similar to) Question Help * Pro forma income statement Scenario analysis Allen Products, Inc., wants to do a scenanio analysis for the coming year. The pessimistic prediction for sales is $897,000; the most likely amount of sales is $1,124,000; and the optimistic prediction is S1,275,000. Allen's income statement for the most recent year is shown here a. Use the percent-of-sales method, the income statement for December 31, 2015, and the sales revenue estimates to develop pessimistic, mcst likely, and optimistic pro forma income statements for the coming year. b. Explain how this methad could result in overstatement of profits for the pessimistic case and understatement of profits for the most likely and optimistic cases. c. Restate the pro forma income statements prepared in part a. to incorporate the following assumptions about the 2015 costs: $271,620 of the cost of goods sold is fixed; the rest is variable. $139,342 of the operating expenses is fixed; the rest is variable. All the interest expense is d. Compare your findings in part c. to your findings in part a. Do your observations confirm your explanation in part b? fixed. (Please see: B) Data Table Data Table (Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadsheet.) Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Allen Products, Inc. Income Statement for the Year Ended December 31, 2015 Sales revenue Less: cost of good sold $938,300 Allen Products, Inc. Income Statement for the Year Ended December 31, 2015 Fixed Variable 271,620 187,209 $479,471 Sales revenue Less: cost of good sold Gross profits Less: operating expenses Operating profits Less: interest expense Net profit before taxes Less: taxes (rate 30%) Net profits after taxes S938,300 458,829 S479,471 198,920 S280,551 29,087 $251,464 75,439 $176,025 Gross profits Less: operating expenses Fixed 139,342 59,578 $280,551 29,087 $251,464 75,439 $176,025 Ne Variable Operating profits Less: interest expense Net profit before taxes Less: taxes (rate 30%) Net profits after taxes Enter a Print Done Print Done heck Answer remaining