Leidenheimer Corporation manufactures small airplane propellers. Sales for year

Question

Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled $1,790,000. Information regarding resources for the month follows Used S 60,000 107,000 95,000 52,000 43,000 136,000 310,000 120,000 150,000 19,000 116,000 Supplied 74,000 107,000 103,000 66.000 51,000 200,000 310,000 200,000 167,000 39,000 146,000 Energy Quality inspections Long-term labor Short-term labor Setups Materials Customer service Administrative In addition, Leidenheimer spent $70,000 on 50 engineering changes with a cost-driver rate of $1,400 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.

Explanation / Answer

Traditional Income Statement Sales revenue 1790000 Parts management 74000 Energy 107000 Quality inspections 103000 Long­term labor 66000 Short­term labor 51000 Setups 200000 Materials 310000 Depreciation 200000 Marketing 167000 Customer service 39000 Administrative 146000 Engineering changes 70000 Outside contracts 57600 Total costs 1590600 Operating profit 199400 Activity-Based Income Statement Resources Used Unused Resource Capacity Resources Supplied Sales revenue 1790000 Costs Unit Materials 310000 0 310000 Energy 107000 0 107000 Depreciation 120000 80000 200000 Parts management 60000 14000 74000 Outside contracts 57600 0 57600 654600 94000 748600 Batch Setups 136000 64000 200000 Engineering changes 70000 0 70000 206000 64000 270000 Product and customer sustaining Marketing 150000 17000 167000 Customer service 19000 20000 39000 Quality inspections 95000 8000 103000 264000 45000 309000 Capacity sustaining Long­term labor 52000 14000 66000 Short­term labor 43000 8000 51000 Administrative 116000 30000 146000 211000 52000 263000 Total costs 1335600 255000 1590600 1590600 Operating profit 199400

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