Question

Income Statement Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 51,700 units will be produced, with the following total costs: Direct materials ? Direct labor 73,000 Variable overhead 25,000 Fixed overhead 245,000 Next year, Pietro expects to purchase $129,000 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 $11,500 Ending $5,900 $13,500 Next year, Pietro expects to produce 51,700 units and sell 51,000 units at a price of $16.00 each. Beginning inventory of finished goods is $47,500, and ending inventory of finished goods is expected to be $39,000. Total selling expense is projected at $24,000, and total administrative expense is projected at $101,000. Required: Hide 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 Sales $ % Cost of goods sold % Gross margin $ % Less operating expenses: Selling expenses $ Administrative expenses % Operating income $ %

Answer 1

Pietro Frozen Foods Inc

Statement of Cost of goods sold for the coming year

Particulars	Amount($)	Amount($)
Direct materials:
Beginning direct materials	$6000
Add: Direct materials purchase	$129000
Less: Ending direct materials	($5900)
Direct materials used		$129100
Direct labor		$73000
Manufacturing overhead:
Variable overhead	$25000
Fixed overhead	$245000
Total manufacturing overhead		$270000
Manufacturing cost		$472100
Work in process:
Add: Beginning work in process		$11500
Less:Ending work in process		($13500)
Cost of goods manufactured		$470100
Finished goods:
Add: Beginning finished goods		$47500
Less: Cost of goods available for sale		$517600
Ending finished goods		($39000)
Cost of goods sold		$478600.

Income statement for the coming year

Particulars	Amount($)	Percentage(%)
Sales (51000 units * $16)	$816000	100%
Less: Cost of goods sold	($478600)	58.65%
Gross profit	$337400	41.35%
Less: Operating expenses:
Selling expenses	($24000)	2.94%
Administrative expenses	($101000)	12.38%
Operating profit	$212400	26.03%.