Answer:
Conlon Enterprises
a. Traditional Income Statement
Sales revenue $330,000
Setup costs 169,400
Clerical costs 112,000
Operating profit $48,600
b. Activity-based Income Statement:
Resources Resources Unused Resource Total
Supplied Used Capacity
Sales revenue $330,000
Costs:
Volume-related Setups $172,750 $169,400 $3,350
Batch-related Clerical 120,700 112,000 8,700
Total costs $293,450 $281,400 $12,050 281,400
Operating profit $48,600
Explanation:
a) Data and Calculations:
Cost Driver Rate Cost Driver Volume Total Resources used
Resources used
Setups $ 385 per run 440 runs $169,400
Clerical 40 per page 2,800 pages typed $112,000
Resources supplied
Setups $ 172,750
Clerical 120,700
Sales revenue totaled $330,000
