Windom Corporation Manufactures Small Airplane Propellers In Addition, Windom Spent $25,000 on 50 Engineering Changes with $850,000

Essay

Windom Corporation manufactures small airplane propellers. Sales for April totaled $850,000. Information regarding resources for the month follows:
$\begin{array}{lrr}&\text { Resources Used}&\text { Resources Supplied }\\\text { Parts management } & \$ 30,000 & \$ 35,000 \\\text { Energy } & 50,000 & 50,000 \\\text { Quality inspections } & 45,000 & 50,000 \\\text { Long-term labor } & 25,000 & 35,000 \\\text { Temporary labor } & 20,000 & 24,000\\\text { Setups } & 70,000 & 100,000\\\text { Materials } & 150,000 & 150,000 \\\text { Depreciation } & 60,000 & 100,000 \\\text { Marketing } & 70,000 & 75,000 \\\text { Customer service } & 10,000& 20,000 \\\text { Administrative } & 50,000 & 70,000\end{array}$
In addition, Windom spent $25,000 on 50 engineering changes with a cost driver rate of $500 and $30,000 on eight outside contracts with a cost driver rate of $3,750.
Required:
a. Prepare a traditional income statement.
b. Prepare an activity-based income statement.