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Indirect Labor $20,000 Fringe Benefits 16,000 Computer Systems 10,000 Machinery 8,000 Maintenance 4,000 Energy 2,000 Total $60,000

The document outlines various expense categories totaling $60,000, including indirect labor and fringe benefits. It presents a traditional income statement showing sales, material costs, direct labor, and operating income for four product categories, with a total sales figure of $150,600. Additionally, it details direct costs and activity cost drivers, highlighting production volumes, unit costs, and profit/loss for each product, revealing varying returns on sales.

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Karan Kumar
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17 views5 pages

Indirect Labor $20,000 Fringe Benefits 16,000 Computer Systems 10,000 Machinery 8,000 Maintenance 4,000 Energy 2,000 Total $60,000

The document outlines various expense categories totaling $60,000, including indirect labor and fringe benefits. It presents a traditional income statement showing sales, material costs, direct labor, and operating income for four product categories, with a total sales figure of $150,600. Additionally, it details direct costs and activity cost drivers, highlighting production volumes, unit costs, and profit/loss for each product, revealing varying returns on sales.

Uploaded by

Karan Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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Expense Category Expense

Indirect Labor $20,000


Fringe Benefits 16,000
Computer Systems 10,000
Machinery 8,000
Maintenance 4,000
Energy 2,000
Total $60,000
Exhibit 1 Traditional Income Statement

Blue Black Red Purple Total


Sales $75,000 $60,000 $13,950 $1,650 $150,600
Material Costs 25,000 20,000 4,680 550 50,230
Direct Labor 10,000 8,000 1,800 200 20,000
Overhead @300% 30,000 24,000 5,400 600 60,000
Total Operating $10,000 $8,000 $2,070 $300 $20,370
Income
Return on Sales 13.6% 13.3% 14.8% 18.2% 13.5%
Exhibit 2 Direct Costs and Activity Cost Drivers

Blue Black Red Purple Total


Production Sales Volume 50,000 40,000 9,000 1,000 100,000
Unit Selling Price $1.50 $1.50 $1.55 $1.65
Materials-unit cost $0.50 $0.50 $0.52 $0.55
Direct labor hrs/unit 0.02 0.02 0.02 0.02 2,000
Machine hours/unit 0.1 0.1 0.1 0.1 10,000
5000 4000 900 100
Production runs 50 50 38 12 150
Setup time/run 4 1 6 4 15
Total setup time (hours) 200 50 228 48 526
Parts administration 1 1 1 1 4

Computer Systems Record Keeping($2000) 500 500 500 500


Computer Systems($10000) 2666.6667 2666.667 2026.667 640
Indirect Labour Cost(PR) 3333.3333 3333.333 2533.333 800
Indirect Labour Cost(ST) 3041.8251 760.4563 3467.681 730.038
Indirect Labour Cost(AD) 500 500 500 500
Fringe Benefits IL Cost (PR) 1333.3333 1333.333 1013.333 320
Fringe Benefits IL Cost(ST) 1216.73 213.3333 1280 853.3333
Fringe Benefits IL Cost(AD) 200 200 200 200
Fringe benefits DL($8000) 4000 3200 720 80
Machinery($8000) 4000 3200 720 80
Maintenance($4000) 2000 1600 360 40
Energy ($2000) 1000 800 180 20
Total 23291.888 17807.12 13001 4263.371
Overhead/unit 0.47 0.45 1.44 4.26
Materilal Cost 0.5 0.5 0.52 0.55
Direct Labour 0.2 0.2 0.2 0.2
Cost Price/Unit 1.17 1.15 2.16 5.01
Selling Price/Unit 1.50 1.5 1.55 1.65
Profit/Loss 0.33 0.35 -0.61 -3.36
Sales 75000.00 60000 13950 1650
Return on Sales 22.28% 23.65% -39.65% -203.84%
Indirect Labour
10000 50% production run PR
8000 40% Setup time ST
2000 10% Administration Cost AD
PR ST
8000 Fringe benefits Indirect Labour 4000 3200
8000 Fringe benefits direct Labour 4000 3200
AD
800
800

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