Carbon Company provides the following information about resources. Unused Resources Capacity Cost Driver Volume Resources used Materials $ 2,100 9,000 pounds Energy 3,490 390 machine-hours Setups 0 81 setups Purchasing 3,700 90 purchase orders Customer service 4,000 90 returns Long-term labor 4,800 340 labor-hours Administrative 8,820 440 labor-hours Resources supplied Materials $ 101,100 Energy 21,430 Setups 24,300 Purchasing 26,200 Customer service 17,500 Long-term labor 30,300 Administrative 31,700 Sales revenue for Carbon Company is $550,000. Required: A. Prepare a traditional income statement. Traditional Income Statement Total costs B. Prepare an activity-based income statement. Activity-Based Income Statement Resources Used Unused Resource Capacity Resources Supplied Costs Unit Batch Product and customer sustaining Capacity sustaining Total costs

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

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Carbon Company provides the following information about resources.

	Unused Resources Capacity	Cost Driver Volume
Resources used
Materials	$	2,100	9,000	pounds
Energy		3,490	390	machine-hours
Setups		0	81	setups
Purchasing		3,700	90	purchase orders
Customer service		4,000	90	returns
Long-term labor		4,800	340	labor-hours
Administrative		8,820	440	labor-hours
Resources supplied
Materials	$	101,100
Energy		21,430
Setups		24,300
Purchasing		26,200
Customer service		17,500
Long-term labor		30,300
Administrative		31,700

Sales revenue for Carbon Company is $550,000.

Required:

A. Prepare a traditional income statement.

Traditional Income Statement









Total costs

B. Prepare an activity-based income statement.

Activity-Based Income Statement
	Resources Used	Unused Resource Capacity	Resources Supplied

Costs
Unit




Batch




Product and customer sustaining



Capacity sustaining




Total costs

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