Paul's Limo Service has the following information for June:
Sales revenue .................... $25,000
Variable costs of operations, excluding labor costsa ..... 7,500
Employee wages and salariesb .............. 10,000
Manager salariesc ................... 2,000
Fixed cost of automobilesd ................ 2,500
Building costs (rent, utilities, etc.)e ............ 1,250
a5 percent of this cost was wasted due to poor directions given to limo drivers.
b5 percent of this cost was for time spent by limo drivers because of poor directions.
c10 percent of this cost was time taken to address customer complaints.
dThe limos have 40 percent unused capacity.
eThe building has 10 percent unused capacity.

Required
a. Using the traditional income statement format, prepare a value income statement.
b. What value would there be to Paul from preparing the same information inJuly?

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2 3 4 Paul's Limo Service Value Income Statement For the Month Ending June 30 Nonvalue-added Activities Value-added Activities Total 6 7 Sales revenue 25,000 25,000 8 Cost of services sol 9 Viable costs of operations, excluding labor costs 10 Employee wages and salaries 375 a 500 a 1,000b 7,125 9,500 1,500 7,500 10,000 2,500 6,8755,000 Fixed cost of automobiles 12 Gross margin 13 Administrative expenses (1,875) 14 Managers' salaries 15 Building costs 16 Operating income (loss) 17 18 a. 5% nonvalue-added 19 b. 40% nonvalue-added 20 ic. 1090 nonvalue-added 200 c 125 C 1,800 1,125 2,000 1,250 3,950$ 1,750 (2,200)