Leidenheimer Corporation manufactures small airplane propellers. Sales for year
ID: 2447503 • Letter: L
Question
Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled $880,000. Information regarding resources for the year follows:
In addition, Leidenheimer spent $40,500 on 45 engineering changes with a cost-driver rate of $900 and $60,000 on 8 outside contracts with a cost driver rate of $7,500.
Prepare an activity-based income statement. (Input all values as positive numbers.)
Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled $880,000. Information regarding resources for the year follows:
Explanation / Answer
Answer:(a)Traditional income statement:
Answer:(b) Activity-based income statement:
Answer:(c) Activity -Based income statement provides useful information to managers.
Particulars Amount ($) Sales 880000 Parts management 34000 Energy 53000 Quality inspections 48000 Long-term labor 38000 Short-term labor 23000 Setups 110000 Materials 130000 Depreciation 110000 Marketing 74000 Customer service 20000 Administrative 56000 Engineering changes 40500 Outside contracts 60000 Total costs 796500 Operating Profit 83500