Question

Income Statement

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 53,500 units will be produced, with the following total costs:

Direct materials	?
Direct labor	52,000
Variable overhead	25,000
Fixed overhead	235,000

Next year, Pietro expects to purchase $117,500 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	$11,800
Ending	$5,900	$13,800

Next year, Pietro expects to produce 53,500 units and sell 52,800 units at a price of $16.00 each. Beginning inventory of finished goods is $44,500, and ending inventory of finished goods is expected to be $36,000. Total selling expense is projected at $24,500, and total administrative expense is projected at $101,500.

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
Sales		$	%
Cost of goods sold			%
Gross margin		$	%
Less operating expenses:
Selling expenses	$
Administrative expenses			%
Operating income		$	%

Answer 1

Page No. Date Pietro Frozen Foods Inc Income Statement Por the coming year. Anto) of sales. 844800 100V. (52800x/6) Cost of goods sold 6436110) 51.62 Gooss Margis $408700 48.38% Hesse Operating eep 2.97 Selling $24500 expenses 12.01% Admenis batine eap. $101500 o pescting encome $282700 33.46% Calculation g cost of goods sold Direct material Opening stole - $6000 chann Muchases $117500 7 Ending stock ($5900) $117660 Dueet labour n $52000 Drechead Vauable $85000 Fixed over hood $235000 (t) Opening WIP & n6oo - Closing WIP Cost of Production $427600 (7) Opening FG & Closing G $636000) Cost of goods sold $436100 Up $(13800) $ 4 4 500