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Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993 Exercise 9
Activity-Based Reporting: Service Organization
Allcott Computer Services (ACS) provides computer training and repair services for schools and local businesses. Sales for year 1 totaled $2,700,000. Information regarding resources for the year includes the following:
In addition, ACS spent $84,000 on 500 repair verifications with a cost driver rate of $150.
Required
Management has requested that you do the following:
a. Prepare a traditional income statement.
b. Prepare an activity-based income statement.
c. Write a short report to management explaining why the activity-based income statement provides useful information to managers. Use the information from requirements ( a ) and ( b ) to develop examples for your report.
Allcott Computer Services (ACS) provides computer training and repair services for schools and local businesses. Sales for year 1 totaled $2,700,000. Information regarding resources for the year includes the following:
In addition, ACS spent $84,000 on 500 repair verifications with a cost driver rate of $150.
Required
Management has requested that you do the following:
a. Prepare a traditional income statement.
b. Prepare an activity-based income statement.
c. Write a short report to management explaining why the activity-based income statement provides useful information to managers. Use the information from requirements ( a ) and ( b ) to develop examples for your report.
Explanation
Verified
Verified
(a)Traditional Income Statement
The inc...
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
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