* Problem 8-35A (Part Level Submission) The Daniels Tool & Die Corporation has been in existence for a little over three years. The company's sales have been increasing each year as it builds a reputation. The company manufactures dies to its customers' specifications and therefore uses a job-order cost system. Factory overhead is applied to the jobs based on direct labour hours-the absorption-costing (full) method. Overapplied or underapplied overhead is treated as an adjustment to Cost of Goods Sold. The company's income statements and other data for the last two years are as follows: DANIELS TOOL & DIE CORPORATION 2015-2016 Comparative Income Statements 2015 2016 Sales $835,700 $1,015,200 Cost of goods sold Finished goods, January 1 24,000 17,700 Cost of goods manufactured 545.300 657,600 Total available 569,300 675,300 Finished goods, December 31 17,700 13,300 Cost of goods sold before overhead adjustment 551,600 662,000 Underapplied factory overhead 35,200 14,000 Cost of goods sold 586,800 676,000 Gross profit 248.900 339,200 Selling expenses 81,700 94,100 Administrative expenses 69,200 74,600 Total operating expenses 150,900 168,700 Operating income $98,000 $170,500 Daniels Tool & Die Corporation Inventory Balances January 1, 2015 December 31, 2015 Raw material $21,300 $29,300 Work in process $40,700 $47,300 Direct labour hours (used in WIP) 1,390 1,650 Finished goods $24,000 $17,700 Direct labour hours (used in FG) 1,450 1,040 December 31, 2016 $10,600 $63,500 2,480 $13,300 810 Daniels used the same predetermined overhead rate in applying overhead to its production orders in both 2015 and 2016. The rate was based on the following estimates: Fixed factory overhead Variable factory overhead Direct labour hours (used in WIP) Direct labour costs (used in FG) $24,580 $152,396 24,580 $147,480 In 2015 and 2016, the actual direct labour hours used were 21,000 and 23,500, respectively. Raw materials put into production were $291,600 in 2015 and $370,900 in 2016. The actual fixed overhead was $42,400 for 2015 and $30,200 for 2016, and the planned direct labour rate was the direct labour achieved. For both years, all of the administrative costs were fixed. The variable portion of the selling expenses results from a 5% commission that is paid as a percentage of the sales revenue. *(a) For the year ended December 31, 2016, prepare a revised income statement for Daniels Tool & Die Corporation using the variable-costing method. (Round answers to 0 decimal places, e.g. 5,275.) *(a) For the year ended December 31, 2016, prepare a revised income statement for Daniels Tool & Die Corporation using the variable-costing method. (Roun Daniels Tools & Die Corporation Variable Costing Income Statement For the year ended December 31, 2016 Sales Less Variable costs Variable costs of goods $ Variable selling and adr| Total variable costs Contribution margin Add Fixed costs Fixed manufacturing ov Fixed selling and admir Total fixed costs Operating income $