Activity-Based Reporting.The Sampson Corporation Manufactures Oxygen Tanks

question 111

Essay

Activity-based reporting.The Sampson Corporation manufactures oxygen tanks
for industrial environments.Information regarding resources for the month of March follows.

In addition,$23,000 was spent on 700 quality inspections with a cost driver rate of $30,and $8,000 was spent on 200 customer-service cost driver units with a cost driver rate of $35.Sales for March were $335,000.Management has requested the following statements be prepared.
Required:
a.Prepare a traditional income statement.
b.Prepare an activity-based income statement.
c.Write a short report explaining why the activity-based income statement provides better information to managers.

---

Definitions:

Fundamental Economic

Relating to the basic principles and models that underlie economic theory and practice.

Freebies

Items or services given away for free, often used as a marketing or promotional tool.

Economists

Professionals who study how societies use resources such as raw materials, labor, and capital to produce goods and services and distribute them among the population.

Gasoline Prices

The cost per unit of gasoline, which varies depending on factors like crude oil prices, taxes, and demand.