Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher

Exercise 6

Activity-Based Reporting and Capacity
Refer to Exercise 10-31.
Required
a. Prepare a traditional income statement like the one in Exhibit 10.10.
b. Prepare an activity-based income statement like the one in Exhibit 10.11.
c. Prepare a short report to Gunnison Supply's managers describing how the activity-based income statement prepared in requirement ( b ) can help them manage costs.