Tri-State Mill uses a special sander to finish lumber. Data on the sander and its usage follow. Cost Driver Rate Cost Driver Volume Resources used Energy $ 0.50 per machine-hour 8,000 machine-hours Repairs $ 13 per job 800 jobs Resources supplied Energy $ 7,600 Repairs $ 12,700 Sales revenue from finishing totaled $37,000. Required: a. Prepare a traditional income statement. b. Prepare an activity-based income statement.

Question

Business

Denisse Glass

9 February, 21:59

Tri-State Mill uses a special sander to finish lumber. Data on the sander and its usage follow. Cost Driver Rate Cost Driver Volume Resources used Energy $ 0.50 per machine-hour 8,000 machine-hours Repairs $ 13 per job 800 jobs Resources supplied Energy $ 7,600 Repairs $ 12,700 Sales revenue from finishing totaled $37,000. Required: a. Prepare a traditional income statement. b. Prepare an activity-based income statement.

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Answers (1)

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Genesis Watson · Answer 1

Solution:

a. To Prepare a traditional income statement.

Finishing Sales 37,000.00

Energy Costs 7,600.00

Repair Costs 12,700.00

20,300.00

Operating Profit 16,700.00

b. To Prepare an activity-based income statement.

Resources Used Unused Resources Resources Supplied

Finishing Sales 37,000.00

Costs

Volume Related Energy 4,500 3,000 7,600.00

Batch Related Repairs 10,500 2,100.00 12,700.00

Total Costs 15,000 5,100 20,100.00 20,100.00

Finishing Operating Profits 15,900.00