Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled

\($850,000.\) Information regarding resources for the month follows:

In addition, Leidenheimer spent \($25,000\) on 50 engineering changes with a cost-driver rate of \($500\) and \($30,000\) on eight outside contracts with a cost driver rate of \($3,750.
Required\) Management has requested that you do the following:

a. Prepare a traditional income statement.

b. Prepare an activity-based income statement.

c. Write a short report explaining why the activity-based income statement provides useful information to managers. Use the information from requirements

(a) and

(b) to develop examples for your report.

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Parts management Energy Quality inspections $ 30,000 Resources Used Resources Supplied $ 35,000 50,000 50,000 45,000 50,000 Long-term labor 25,000 35,000 Short-term labor 20,000 24,000 Setups 70,000 100,000 Materials 150,000 150,000 Depreciation 60,000 100,000 Marketing 70,000 75,000 Customer service 10,000 20,000 Administrative 50,000 70,000