TriState Mill uses a special sander to finish lumber Data on

Tri-State Mill uses a special sander to finish lumber. Data on the sander and its usage follow: Cost Driver RateCost Driver Volume Resources used Energy Repassupplied Resources supplied Energy Repairs 0.7 per machine-hour 6,000 machine-hours $ 23 per job 500 jobs 8,300 $13,400 Sales revenue from finishing totaled $44,000 Required a. Prepare a traditional income statement. Traditional Income Statement Finishing sales Energy costs Repair costs Operating profit b. Prepare an activity-based income statement. Activity-Based Income Statement Unused Resources Resources Resource Supplied Finishing sales Costs Volume related-Energy Batch related-Repairs Total costs Finishing operating profits

Solution

ans 1 Traditional Income statement Finishing sales $44,000 Energy cost $8,300 Repair cost 13400 $21,700 Operating Profit $22,300 ans 2 Activity based Income statement Resources used Unused resource capacity Resources supplied Finishing sales $44,000 Costs Volume related-energy 4200 $4,100 $8,300 Batch Related-Repairs 11500 $1,900 $13,400 Total cost 15700 6000 21700 21700 Finishing operating profits $22,300 working Available A Used U Unused A-U Energy cost $8,300 4200 $4,100 (6000*.7) Repair cost $13,400 11500 $1,900 (500*23) If any doubt please comment. If satisfied you can rate