DeLuxe Limo Service has the following information for March.

Sales revenue	$	320,000
Variable costs of operations, excluding labor costsa		96,000
Employee wages and salariesb		107,000
Manager salariesc		41,000
Fixed cost of automobilesd		32,000
Building costs (rent, utilities, etc.)e		19,500

^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.

Required:

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

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

multiple choice

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

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