Refer to Exercise 10-42. Sales revenue for Carbon Company is $300,000.
Refer to Exercise 10-42

Required
a. Prepare a traditional income statement like the one in Exhibit 10.10.
b. Prepare an activity-based income statement like the one in Exhibit 10.11.
c. Prepare a short report to Carbon Company's managers describing how the activity-based income statement prepared in requirement (b) can help them manage costs.

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Unused Resources Capacity Cost Driver Volume Resources used $ 2,000 1,560 8,000 pounds 340 machine-hours 80 setups 0 1,800 7,600 3,400 2,800 0 80 purchase orders 50 returns Customer service . . . 320 labor-hours 420 labor-hours Administrative Resources supplied Setups Customer service . . . Administrative . $98,000 17,880 24,000 21,000 15,600 29,000 28,000