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Bobs Bistro produces party-sized hoagie sandwiches. For next year, Bobs Bistro predicts that 55,200 units will be produced with the following total costs:

Direct materials	?
Direct labor	$56,000
Variable overhead	17,000
Fixed overhead	230,000

Next year, Bobs Bistro expects to purchase $118,000 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	$4,000	$11,600
Ending	$3,900	$13,600

Next year, Bobs Bistro expects to produce 55,200 units and sell 54,500 units at a price of $14.00 each. Beginning inventory of finished goods is $48,500, and ending inventory of finished goods is expected to be $40,000. Total selling expense is projected at $23,000, and total administrative expense is projected at $115,000.

Required:

Question Content Area

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.

Bob's Bistro Income Statement For the Coming Year

			Percent
Administrative expensesCost of goods soldGross marginSalesSelling expenses		$ -	%
Administrative expensesCost of goods soldGross marginOperating incomeSelling expenses		-	%
Administrative expensesCost of goods soldGross marginOperating incomeSelling expenses		$ -	-%
Less: Operating expenses
Cost of goods soldGross marginOperating incomeSalesSelling expenses	$
Administrative expensesCost of goods soldGross marginOperating incomeSales	-	-	%
Operating incomeOperating loss		$	%

2. What if the operating expenses percentage for the past few years was 51.04 percent? Management's reaction might be: investigate production cost management

Regsired 38.35

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