In late February of $2016,$ a devastating ice storm struck the Upper Peninsula of Michigan, causing millions of dollars of damage. Samuels & Murphy $($S&M$),$ a large agricultural nursery, was hit hard. As a result of the storm, $$653,000$ of additional labor and maintenance costs were incurred to clean up the nursery, remove and replace damaged plants, repair fencing, and replace glass broken when nearby tree limbs fell on some of the greenhouses.

Samuels & Murphy is a wholly owned subsidiary of Soilient Inc., an international agricultural conglomerate. The manager of Samuels & Murphy, Reuben Masterson, is reviewing the operating performance of the subsidiary for the year. Here are the results for the year as compared with budget

After thinking about how to present the performance of S&M for the year, Masterson decides to break out the costs of the ice storm from the individual items affected by it and report the storm separately. The total cost of the ice storm, $$653,000,$ consists of additional labor costs of $$320,000,$ additional materials of $$220,000,$ and additional occupancy costs of $$113,000.$ These amounts are net of the insurance payments received due to the storm. The alternative performance statement follows

Summary of Operating Results for the Current Year $($$$000$s$)$

Actual Budgeted Actual as

Results Results $\%$ of Budget

Revenues $$32,149$ $$31,682101\%$

Less

Labor $13,15212,621104\%$

Materials $8,6318,139106\%$

Occupancy costs$*4,2344,236100\%$

Depreciation $2,6872,675100\%$

Interest $1,8751,89599\%$

Total expenses $$30,579$ $$29,566103\%$

Operating profits $$1,570$ $$2,11674\%$

SAMUELS & MURPHY

Summary of Operating Results for the Current Year $($$$000$s$)$

Actual Budgeted Budgeted as

Results Results $\%$ of Budget

Revenues $$32,149$ $$31,682101\%$

Less

Labor $12,83212,621102$

Materials $8,4118,139103$

Occupancy costs $4,1214,23697$

Depreciation $2,6872,675100$

Interest $1,8751,89599$

Total expenses $29,92629,566101\%$

Operating profits before

Ice storm costs $2,2232,116105\%$

Ice storm costs $6530$

Operating profits after

Ice storm costs $$1,570$ $$2,11674\%$