Rex Stanton manages an auto dealership€™s service department. The recent month€™s income statement for his department follows. (1) Analyze the items on the income statement and identify those that definitely should be included on a performance report used to evaluate Stanton€™s performance. List them and explain why you chose them. (2) List and explain the items that should definitely be excluded. (3) List the items that are not definitely included or excluded and explain why they fall into thatcategory.

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Sales of parts ..OP72,000 Costs and expenses Cost of parts sold Bullding depreclation Income taxes allocated to department ···· Interest on long-term Manager's salary Payroll taxes Supplies. 30,000 9.300 8,700 7.500 2,000 8,100 . .5,900 4.400 16,000 debt .-... Wages (hourly) Total costs and expenses. 111,900 S 65,100 Departmental net Income .P