Problem 10-64 (Algo) Activity-Based Reporting: Manufacturing (LO 10-4, 5)

Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled $1,650,000. Information regarding resources for the month follows.

	Resources Used				Resources Supplied
Parts management	$	59,000			$	75,000
Energy		101,000				101,000
Quality inspections		93,000				103,000
Long-term labor		46,000				71,000
Short-term labor		37,000				52,000
Setups		144,000				220,000
Materials		320,000				320,000
Depreciation		110,000				220,000
Marketing		145,000				170,000
Customer service		25,000				44,000
Administrative		119,000				132,000

In addition, Leidenheimer spent $58,500 on 45 engineering changes with a cost-driver rate of $1,300 and $61,600 on 8 outside contracts with a cost driver rate of $7,700.

Required:

Management has requested that you do the following:

a. Prepare a traditional income statement.

b. Prepare an activity-based income statement