b. Prepare an income statement for the month, (Do not leave any empty spaces; input a 0 wherever it is required.) 6 Answer is not complete. Sales 0 $ 1,748,000 0 Cost of goods sold: Beginning inventory 0 Add: Cost of goods manufactured a Goods available for sale 0 0 Less: Ending inventory 0 437,000 9 (437,000) Gross margin 0 1,311,000 Selling and administrative expenses 0 Operating loss a $ 1,311,000 b. Prepare a contribution format income statement for the month. (Do not leave any empty spaces; input a O wherever it is required.) 0 Answer is not complete. Sales 0 $ 1,748,000 0 Variable expenses: Variable cost of goods sold: Fixed selling and administrative expense 0 $ 798,000 9 798,000 798,000 798,000 950,000 Fixed expenses: Ending inventory a 0 Operating loss a $ 950,000 Kenosha Winter Services is a small, familyeowned snoweremoval business. For its sen/ices, the company has always charged a flat fee per hundred square metres of snow removal. The current fee is $10.30 per hundred square metres. However, there is some question about whether the company is actually making any money onjobs for some customersiparticularly those located on more remote properties that require considerable travel time. The owner's daughter. home from school for the summer, has suggested investigating this question using ABC. After some discussion, a simple system consisting of four activity cost pools seemed to be adequate. The activity cost pools and their activity measures appear below: Activity Cost Pool Activity Measure Activity for the Year Snow removal Square metres cleaned (99s) 51,599 hundred square metres Travel to jobs Kilometres driven 29,999 kilometres Job support Number or jobs 2219 jobs other (costs of idle capacity and organizationssustaining costs) None NA The total cost of operating the company for the year is $502,500, which includes the following costs: Wages $195,999 Supplies 47,599 Snow removal equipment depreciation 27,599 Vehicle expenses 47,599 Office expenses 75,999 President's compensation 119,999 Total cost $592,599 Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption across Activity Cost Pools Snow Travel to Removal Jobs Job Support other Total Wages 79% 29% 9% 19% 199% Supplies 199% 9% 9% 9% 199% Snow removal equipment depreciation 39% 9% 9% 29% 199% Vehicle expenses 9% 79% 9% 39% 199% Office expenses 9% 9% 49% 69% 199% President's compensation 9% 9% 45% 55% 199% Job support consists of receiving calls from potential customers at the home ofce, scheduling jobs, billing, resolving issues, and so on
