Income Statement Pietro Frozen Foods, Inc., produces frozen pizzas. For next yea
ID: 2337196 • Letter: I
Question
Income Statement
Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 48,800 units will be produced, with the following total costs:
Direct materials ?
Direct labor 63,000
Variable overhead 20,000
Fixed overhead 200,000
Next year, Pietro expects to purchase $116,000 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 $13,200
Ending $5,900 $15,200
Next year, Pietro expects to produce 48,800 units and sell 48,100 units at a price of $14.00 each. Beginning inventory of finished goods is $39,500, and ending inventory of finished goods is expected to be $31,000. Total selling expense is projected at $25,000, and total administrative expense is projected at $115,500.
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 goods sold percentage for the past few years was 57.23 percent? Management's reaction might be:
I sent over the pictures and the question itself, I need helping becasue I don't know if my answers are correct.
MacBook Air 3 5 4Explanation / Answer
Schedule of Cost of Goods Manufactured: Beginning Inventory of WIP 13200 Add: Current Manufacturing cost Beginning Inventory of RM 6000 Add: Purchases 116000 Total Material available for use 122000 Less: Ending RM inventory 5900 Material consumed 116100 Direct Labor 63000 Manufacturing Variable OH 20000 Manufacturing Fixed OH 200000 Total Manufacturing Cost 399100 Total cost of goods manufacturing 412300 Less: Ending Inventory of WIP 15200 Total Cost of goods manufactured 397100 Schedule of Cost of goods sold: Beginning inventory of FG 39500 Add: Cost of goods manufactured 397100 Total cost of goods available for sale 436600 Less ending inventory of FG 31000 Cost of goods sold 405600 Income Statement: Amount % Sales revenue 673400 100.00% Less: Cost of goods sold 405600 60.23% Gross Margin 267800 39.77% Less: Operating expenses Selling 25000 Admin expenses 115500 140500 20.86% Net Income 127300 18.90%