Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs: Direct materials Direct labor $60,000 Variable overhead 25,000 220,000 Fixed overhead Next year, Pietro expects to purchase $119,300 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows: Direct Materials Inventory Beginning *** $5,600 Ending 4,900 Required: 7 Next year, Pietro expects to produce 50,000 units and sell 49,300 units at a price of $12.50 each. Beginning inventory of finished goods is $42,500, and ending inventory of finished goods is expected to be $34,000. Total selling expense is projected at $26,000, and total administrative expense is projected at $134,000. Work-in-Process Inventory $12,500 14,600 Less operating expenses. 1. Prepare an income statement in good form. Round the percent to four decimal places before converting to a percentage. For example, 38349 would be rounded to 8835 and entered as 88.35. Note: due to rounding, percentages may not add down. Pietro Frozen Foods, Inc. Income Statement For the Coming Year M €15 20 2. What if the cost of goods sold percentage for the past few years was 65 percent? Management's reaction might be: K
Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs: Direct materials Direct labor $60,000 Variable overhead 25,000 220,000 Fixed overhead Next year, Pietro expects to purchase $119,300 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows: Direct Materials Inventory Beginning *** $5,600 Ending 4,900 Required: 7 Next year, Pietro expects to produce 50,000 units and sell 49,300 units at a price of $12.50 each. Beginning inventory of finished goods is $42,500, and ending inventory of finished goods is expected to be $34,000. Total selling expense is projected at $26,000, and total administrative expense is projected at $134,000. Work-in-Process Inventory $12,500 14,600 Less operating expenses. 1. Prepare an income statement in good form. Round the percent to four decimal places before converting to a percentage. For example, 38349 would be rounded to 8835 and entered as 88.35. Note: due to rounding, percentages may not add down. Pietro Frozen Foods, Inc. Income Statement For the Coming Year M €15 20 2. What if the cost of goods sold percentage for the past few years was 65 percent? Management's reaction might be: K
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs:
Direct materials
Direct labor
$60,000
Variable overhead
25,000
220,000
Fixed overhead
Next year, Pietro expects to purchase $119,300 of direct materials. Projected beginning and ending inventories for direct materials and work in process are as follows:
Direct Materials
Inventory
Beginning *** $5,600
Ending
4,900
Required:
7
Next year, Pietro expects to produce 50,000 units and sell 49,300 units at a price of $12.50 each. Beginning inventory of finished goods is $42,500, and ending inventory of finished goods is expected to be $34,000. Total selling expense is projected at
$26,000, and total administrative expense is projected at $134,000.
Work-in-Process
Inventory
$12,500
14,600
Less operating expenses.
1. Prepare an income statement in good form. Round the percent to four decimal places before converting to a percentage. For example, 38349 would be rounded to 8835 and entered as 88.35.
Note: due to rounding, percentages may not add down.
Pietro Frozen Foods, Inc.
Income Statement
For the Coming Year
M
€15
20
2. What if the cost of goods sold percentage for the past few years was 65 percent? Management's reaction might be:
K
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