The Daniels Tool Die Corporation has been in existence for a little over three years The companys 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 hoursthe absorption costing (full) method Overapplied or underapplied overhead is treated as an adjustment to Cost of Goods Sold The companys income statements and other data for the last two years are as follows DANIELS TOOL DIE CORPORATION 20152016 Comparative Income Statements 2015 2016 Sales $834,500 $1,015,000 Cost of goods sold Finished goods, January 1 24,400 17,800 Cost of goods manufactured 542,400 650,200 Total available 566,800 668,000 Finished goods, December 31 17,800 13,000 Cost of goods sold before overhead adjustment 549,000 655,000 Underapplied factory overhead 35,800 14,300 Cost of goods sold 584,800 669,300 Gross profit 249,700 345,700 Selling expenses 81,500 94,400 Administrative expenses 69,100 74,200 Total operating expenses 150,600 168,600 Operating income $99,100 $177,100 Daniels Tool Die Corporation Inventory Balances January 1, 2015 December 31, 2015 December 31, 2016 Raw material $21,600 $29,300 $10,000 Work in process $40,100 $47,400 $63,000 Direct labour hours (used in WIP) 1,390 1,620 2,170 Finished goods $24,400 $17,800 $13,000 Direct labour hours (used in FG) 1,550 1,070 820 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 $24,900 Variable factory overhead $154,380 Direct labour hours (used in WIP) 24,900 Direct labour costs (used in FG) $149,400 In 2015 and 2016, the actual direct labour hours used were 21,000 and 23,800, respectively Raw materials put into production were $291,700 in 2015 and $371,000 in 2016 The actual fixed overhead was $42,200 for 2015 and $18,740 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 Using the information provided, recreate Waterways statements for this division using condensed, three year comparative income statements (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 ) Daniels Tools Die Corporation Variable Costing Income Statement For the year ended December 31, 2016

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The Daniels Tool & Die Corporation has been in existence for a little over three years. The companys sales have been increasing each year as

The Daniels Tool & Die Corporation has been in existence for a little over three years. The companys 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 hoursthe absorption-costing (full) method. Overapplied or underapplied overhead is treated as an adjustment to Cost of Goods Sold. The companys income statements and other data for the last two years are as follows:

DANIELS TOOL & DIE CORPORATION 20152016 Comparative Income Statements
		2015	2016
Sales		$834,500	$1,015,000
Cost of goods sold
	Finished goods, January 1	24,400	17,800
	Cost of goods manufactured	542,400	650,200
	Total available	566,800	668,000
	Finished goods, December 31	17,800	13,000
	Cost of goods sold before overhead adjustment	549,000	655,000
	Underapplied factory overhead	35,800	14,300
Cost of goods sold		584,800	669,300
Gross profit		249,700	345,700
Selling expenses		81,500	94,400
Administrative expenses		69,100	74,200
	Total operating expenses	150,600	168,600
Operating income		$99,100	$177,100

Daniels Tool & Die Corporation Inventory Balances
	January 1, 2015	December 31, 2015	December 31, 2016
Raw material	$21,600	$29,300	$10,000
Work in process	$40,100	$47,400	$63,000
Direct labour hours (used in WIP)	1,390	1,620	2,170
Finished goods	$24,400	$17,800	$13,000
Direct labour hours (used in FG)	1,550	1,070	820

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		$24,900
Variable factory overhead		$154,380
Direct labour hours (used in WIP)		24,900
Direct labour costs (used in FG)		$149,400

In 2015 and 2016, the actual direct labour hours used were 21,000 and 23,800, respectively. Raw materials put into production were $291,700 in 2015 and $371,000 in 2016. The actual fixed overhead was $42,200 for 2015 and $18,740 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.

Using the information provided, recreate Waterways statements for this division using condensed, three-year comparative income statements.

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(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.) Daniels Tools & Die Corporation Variable Costing Income Statement For the year ended December 31, 2016