Tri-State Mill uses a special sander to finish lumber. Data on the sander and its usage follow.

	Cost Driver Rate			Cost Driver Volume
Resources used
Energy	$	0.80	per machine-hour	6,500	machine-hours
Repairs	$	20	per job	550	jobs
Resources supplied
Energy	$	8,400
Repairs	$	13,500

Sales revenue from finishing totaled $45,000.

Required:

a. Prepare a traditional income statement.

Finishing Sales:

Energy Costs:

Repair Costs:

Operating Profit?

b. Prepare an activity-based income statement.

Resources Used Unused Resource Capacity Resources Supplied

Volume Related- Energy

Batch Related- Repairs