Travon's Limo Service provides transportation services in and around Bentonville. Its profits have been declining, and management is planning to add a package delivery service that is expected to increase revenue by $275,000 per year. The total cost to lease additional delivery vehicles from the local dealer is $60,000 per year. The present manager will continue to supervise all services. However, labor and utilities costs will increase by 40% and rent and other costs will increase by 15% when the package delivery service is added. Sales Revenue $960,000 Costs: Vehicle leases $400,000 Labor 290,000 Utilities 50,000 Rent 1 00,000 Other costs 60,000 Manager's Salary 120,000 Total Costs 1,020,000 Operating Loss $ (60,000) Required: Prepare a report of the differential costs and revenues if the delivery service is added. Problem 2: (10 points) Michael Corporation has provided the following data for the month of July: Sales $280,000 Raw materials purchased. 76,000 Direct labor costs 42,000 Manufacturing overhead. 77,000 Selling expenses 20,000 Administrative expenses 35,000 Inventories: Beginning Ending Raw materials $22,000 $33,000 Work-in-process 15,000 23,000 Finished goods 52,000 43,000 Required: Prepare a Statement of Cost of Goods Manufactured for July