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DeLuxe Limo Service has the following information for March. Sales revenue $265,000 Variable costs of operations, excluding labor costs 79,500 Employee wages and salaries
DeLuxe Limo Service has the following information for March. Sales revenue $265,000 Variable costs of operations, excluding labor costs 79,500 Employee wages and salaries" 101,500 Manager salaries 24,500 Fixed cost of automobilesd 26,500 Building costs (rent, utilities, etc.) e 14,000 a2 percent of this cost was wasted due to poor directions given to limo drivers. b 15 percent of this cost was for time spent by limo drivers because of poor directions. 15 percent of this cost was time taken to address customer complaints. d The limos have 35 percent unused capacity. The building has 15 percent unused capacity. Required: a. Using the traditional income statement format, prepare a value income statement. (Loss amounts should be inclicated with a minus sign.) Sales revenue DELUXE LIMO SERVICE Value Income Statement For the Month Ending March 31 Nonvalue- added Activities Value-added Activities Total 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) b. What value would there be to the managers at DeLuxe from preparing the same information in April? O Preparing a April statement helps DeLuxe see whether he is improving in reducing nonvalue-added activities. O Preparing a April statement helps DeLuxe see whether he is improving in reducing value-added activities.
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