Management has requested that you do the following: Prepare a traditional income statement. Prepare an activity-based income statement.
Management has requested that you do the following: Prepare a traditional income statement. Prepare an activity-based income statement.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Lozier Catering and Events (LCE) offers a variety of services from small gatherings to large weddings and corporate retreats. Sales for year 1 totaled $877,500. Information regarding resources for the year includes the following:
| Resources Used | Resources Supplied | |
|---|---|---|
| Depreciation | $ 56,550 | $ 58,175 |
| Training | 29,250 | 35,100 |
| Transportation | 52,000 | 55,575 |
| Publicity | 72,800 | 78,000 |
| Permanent staff | 146,250 | 201,500 |
| Temporary staff | 269,750 | 276,250 |
| Invoicing and records | 24,375 | 27,300 |
| Administrative | 45,500 | 51,350 |
Required:
Management has requested that you do the following:
- Prepare a traditional income statement.
- Prepare an activity-based income statement.
Transcribed Image Text:Capacity sustaining
Total costs
CA
$
0 $
0
< Required A
0 $
0
0
0
$
Required B >
0
0
Transcribed Image Text:Required A Required B
Prepare an activity-based income statement.
Costs
Unit
Batch
Product and customer sustaining
Activity-Based Income Statement
Unused
Resource
Capacity
Resources
Used
$
$
CA
$
CA
0 $
0 $
0 $
Resources
Supplied
0s
0 $
0 $
0
0
0
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