Activity-based reporting. The Almay Corporation manufactures oxygen tanks for deep-sea divers. Information regarding resources for the month of March follows.

In addition. $22,000 was spent on 800 quality inspections with a cost driver rate of $25. and $8,000 was spent on 200 customer-service cost driver units with a cost driver rate of $30. Sales for March were $350,000. Management has requested that you:

a. prepare a traditional income statement (like Exhibit 4.9).

b. prepare an activity-based income statement (like Exhibit 4.

10).

c. write a short report explaining why the activity-based income statement provides better information to managers. Use information for Almay Corporation in examples.

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Resources Used Resources Supplied Marketing $28.000 $30,000 Depreciation 24,000 40,000 Outside Contracts 12,000 12.000 Materials 60.000 60,000 Setups 14.000 20.000 Energy 20,000 21.000 Parts Management 15,000 16,000 Engineering Changes 10,000 12,000 Short-term Labor. 7,000 7,000 Long-term Labor 10,000 14,000 Administrative 20,000 26,000