Question

Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled $1,690,000. Information regarding resources for the month follows: Resources Used Resources Supplied 74,000 101,000 110,000 73,000 50,000 200,000 330,000 200,000 166,000 43,000 143,000 Parts management $ 64,000 101,000 91,000 49,000 40,000 135,000 330,000 120,000 139,000 25,000 107,000 Energy Quality inspections Long-term labor Short-term labor Setups Materials Depreciation Marketing Customer service Administrative In addition, Leidenheimer spent $45,000 on 50 engineering changes with a cost-driver rate of $900 and $57,600 on 8 outside contracts with a cost driver rate of $7,200. Required Management has requested that you do the following: a. Prepare a traditional income statement. Traditional Income Statement $ 1,690,000 Sales revenue Parts $74,000 management Energy Quality inspections Long-term labor 101,000 110,000 73,000 Short-term labor 50,000 Setups Materials Depreciation Marketing Customer service 200,000 330,000 200,000 166,000 43,000 143,000 Administrative Engineering changes Outside contracts 45,000 57,600 1,592,600 $ 97,400 Total costs Operating profit b. Prepare an activity-based income statement b. Prepare an activity-based income statement. Activity-Based Income Statement Unused Resources Resource Supplied Resources Used Сарacity Costs Unit 0$ 0$ 0 Batch 0 $ 0 $ 0 Product and customer sustaining O$ $ 0 Capacity sustaining 0$ 0$ 0 $ Total costs 0 $ 0 LA GA

Answer 1

Activity-based Income Statement
	Resources used	Unused Resource capacity	Resources applied
Sales				$ 1,690,000.00
Costs
unit
Parts management	$             64,000.00	$    10,000.00	$                   74,000.00
energy	$          101,000.00	$                   -	$                101,000.00
Short term labor	$             40,000.00	$    10,000.00	$                   50,000.00
Materials	$          330,000.00	$                   -	$                330,000.00
Outside contracts	$             57,600.00	$                   -	$                   57,600.00
	$          592,600.00	$    20,000.00	$                612,600.00
Batch
Quality inspection	$             91,000.00	$    19,000.00	$                110,000.00
Setups	$          135,000.00	$    65,000.00	$                200,000.00
	$          226,000.00	$    84,000.00	$                310,000.00
Product and customer sustaining
Marketing	$          139,000.00	$    27,000.00	$                166,000.00
Customer Service	$             25,000.00	$    18,000.00	$                   43,000.00
Engineering changes	$             45,000.00	$                   -	$                   45,000.00
	$          209,000.00		$                254,000.00
Capacity sustaining
Long-term labor	$             49,000.00	$    24,000.00	$                   73,000.00
Depreciation	$          120,000.00	$    80,000.00	$                200,000.00
Administrative	$          107,000.00	$    36,000.00	$                143,000.00
	$          276,000.00	$ 140,000.00	$                416,000.00
Total costs	$       1,303,600.00	$ 244,000.00	$             1,592,600.00	$ 1,592,600.00
Operating Profit				$        97,400.00