Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled $1,640,000. Information regarding resources for the month follows:
Resources Used Resources Supplied
Parts management $ 60,000 $ 72,000
Energy 104,000 104,000
Quality inspections 89,000 110,000
Long-term labor 47,000 74,000
Short-term labor 45,000 55,000
Setups 135,000 230,000
Materials 320,000 320,000
Depreciation 130,000 230,000
Marketing 134,000 158,000
Customer service 21,000 37,000
Administrative 117,000 142,000
In addition, Leidenheimer spent $65,000 on 50 engineering changes with a cost-driver rate of $1,300 and $61,600 on 8 outside contracts with a cost driver rate of $7,700.
Required:
Management has requested that you do the following:
a. Prepare a traditional income statement.
b. Prepare an activity-based income statement.