Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values.

Pretax income	?
Gross profit	?
Allocated costs (uncontrollable)	$2,040
Labor expense	41,570
Sales	189,000
Research and development (uncontrollable)	315
Depreciation expense	17,000
Net income/(loss)	?
Cost of goods sold	119,070
Selling expense	1,240
Total expenses	?
Marketing costs (uncontrollable)	780
Administrative expense	700
Income tax expense (21% of pretax income)	?
Other expenses	320

Question Content Area

A. Prepare the income statement using the above information. Round your answers to the nearest dollar.

BDS Enterprises Income Statement For the Year Ended Dec. 31, 20xx

Allocated Costs (Uncontrollable)Direct MaterialLabor ExpenseSalesService Revenue	$- Select -
Allocated Costs (Uncontrollable)Cost of Goods SoldDirect MaterialLabor ExpenseService Revenue	- Select -
Gross ProfitGross LossNet IncomeNet LossSales	$- Select -
Cost of Goods SoldIncome Tax Expense (21% of Pretax Income)Labor ExpensePretax IncomeSales	$- Select -
Cost of Goods SoldDepreciation ExpenseIncome Tax Expense (21% of Pretax Income)Pretax IncomeSales	- Select -
Cost of Goods SoldIncome Tax Expense (21% of Pretax Income)Pretax IncomeSelling ExpenseSales	- Select -
Administrative ExpenseCost of Goods SoldIncome Tax Expense (21% of Pretax Income)Pretax IncomeSales	- Select -
Cost of Goods SoldIncome Tax Expense (21% of Pretax Income)Other ExpensesPretax IncomeSales	- Select -
Allocated Costs (Uncontrollable)Cost of Goods SoldIncome Tax Expense (21% of Pretax Income)Pretax IncomeSales	- Select -
Cost of Goods SoldIncome Tax Expense (21% of Pretax Income)Pretax IncomeResearch and Development (Uncontrollable)Sales	- Select -
Cost of Goods SoldIncome Tax Expense (21% of Pretax Income)Marketing Costs (Uncontrollable)Pretax IncomeSales	- Select -
Total Expenses	$fill in the blank cb48c8f7dfbe013_23
Gross ProfitGross LossNet LossPretax IncomePretax Loss	$- Select -
Allocated Costs (Uncontrollable)Cost of Goods SoldIncome Tax Expense (21% of Pretax Income)Marketing Costs (Uncontrollable)Pretax Income	- Select -
Gross ProfitGross LossNet IncomeNet LossPretax Income	$- Select -

Question Content Area

B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. Round your percentage answers to one decimal place.

Profit margin	fill in the blank bca4bb059021003_1	%
Return on investment	fill in the blank bca4bb059021003_2	%
Residual income	$fill in the blank bca4bb059021003_3

C. Which of the following statements is correct? Uncontrollable costs are included in the income statement because

a. these costs ultimately affect each division.

b. these costs are the responsibility of each division manager.

c. these costs are non-recurring.

d. these costs are head office's responsibility.