Leidenheimer Corporation manufactures small airplane propellers. Sales for year

Question

Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled $1,710,000. Information regarding resources for the month follows 0 $ 59,000 105,000 89,000 54,000 41,000 143.000 300,000 120,000 148,000 23,000 117,000 S 75,000 105,000 107,000 67,000 57,000 220,000 300,000 220,000 163,000 41,000 41,000 Parts management Quality inspections Long-term labor Short-term labor Customer service Administrative In addition, Leidenheimer spent $50,000 on 50 engineering changes with a cost-driver rate of $1,000 and $60,000 on 8 outside contracts with a cost driver rate of $7,500 5

Explanation / Answer

TRADITIONAL INCOME STATEMENT Sales $ 1,710,000.00 Parts Management $        75,000.00 Energy $      105,000.00 Quality Inspection $      107,000.00 Long term labour $        67,000.00 Short term labour $        57,000.00 Setups $      220,000.00 Material $      300,000.00 depreciation $      220,000.00 Marketing $      163,000.00 Customer Service $        41,000.00 Administrative $      141,000.00 Engineering Changes $        50,000.00 Outside Cntracts $        60,000.00 Total Cost $ 1,606,000.00 Operating Profit $      104,000.00 ACTIVITY BASED INCOME STATEMENT Sales $ 1,710,000.00 Resources Used Unused Resource Capacity Resources Supplied Units Parts Management $        59,000.00 $        16,000.00 $        75,000.00 Energy $      105,000.00 $                       -   $      105,000.00 Short term labour $        41,000.00 $        16,000.00 $        57,000.00 Material $      300,000.00 $                       -   $      300,000.00 Outside Cntracts $        60,000.00 $                       -   $        60,000.00 $      565,000.00 $        32,000.00 $      597,000.00 Batch Quality Inspection $        89,000.00 $        18,000.00 $      107,000.00 Setups $      143,000.00 $        77,000.00 $      220,000.00 $      232,000.00 $        95,000.00 $      327,000.00 Product and Customer Sustaining Marketing $      148,000.00 $        15,000.00 $      163,000.00 Customer Service $        23,000.00 $        18,000.00 $        41,000.00 Engineering Changes $        50,000.00 $                       -   $        50,000.00 $      221,000.00 $        33,000.00 $      254,000.00 Capacity Sustaining Long term labour $        54,000.00 $        13,000.00 $        67,000.00 depreciation $      120,000.00 $      100,000.00 $      220,000.00 Administrative $      117,000.00 $        24,000.00 $      141,000.00 $      291,000.00 $      137,000.00 $      428,000.00 Total Cost $ 1,309,000.00 $      297,000.00 $ 1,606,000.00 $ 1,606,000.00 Operating Profit $      104,000.00

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