Lockyear Window Company makes and sells three product lines – custom detailed windows, large standard windows and small standard windows. The statement of operating income for the most recent period is shown next.

Lockyear uses a traditional cost accounting system. A process map developed to describe this system is shown in Exhibit 4.17. To aid in the company’s analysis of its product mix strategy, you have been asked to determine operating income (loss) for each product line. Use a format similar to Exhibit 4.3 on p. 122 in the text.

Exhibit 4.17

Exhibit 4.3

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Lockyear Window Company statement of operating income Sales Cost of goods sold: Direct material Indirect production costs Gross profit Selling and administrative expenses: Commissions Distribution to warehouses Income before unallocated expenses Unallocated expenses Administrative salaries Other administrative expenses Operating income before taxes £40,000 41,000 15,000 10,400 8,000 4,000 Total £155,000 81,000 74,000 25,400 48,600 12,000 £ 36,600