DeLuxe Limo Service has the following information for March.

Sales revenue	$	310,000
Variable costs of operations, excluding labor costsa		93,000
Employee wages and salariesb		106,000
Manager salariesc		38,000
Fixed cost of automobilesd		31,000
Building costs (rent, utilities, etc.)e		18,500

^a 5 percent of this cost was wasted due to poor directions given to limo drivers.

^b 5 percent of this cost was for time spent by limo drivers because of poor directions.

^c 10 percent of this cost was time taken to address customer complaints.

^d The limos have 40 percent unused capacity.

^e The building has 10 percent unused capacity

a. Using the traditional income statement format, prepare a value income statement. (Loss amounts should be indicated with a minus sign.)

DELUXE LIMO SERVICE
Value Income Statement
For the Month Ending March 31
	Nonvalue-added Activities	Value-added Activities	Total
Sales revenue
Cost of services sold:
Variable costs of operations, excluding labor costs
Employee wages and salaries
Fixed cost of automobiles
Gross margin (loss)
Administrative expenses:
Manager salaries
Building costs
Operating income (loss)

What value would there be to the managers at DeLuxe from preparing the same information in April?

A. Preparing a April statement helps DeLuxe see whether he is improving in reducing nonvalue-added activities.

B. Preparing a April statement helps DeLuxe see whether he is improving in reducing value-added activities.