Selected information about resources for MnM Productions, which produces music on CDs, is as follows:

a. Prepare an activity-based management income statement.
b. Write a short report stating why managers should know the difference between resources used and resources supplied. Give examples of how managers could use the information about resources used and resources supplied.
c. Management wants to keep the cost of unused capacity to less than 20 percent of total costs. How well is the companydoing?

Transcribed Image Text:

Cost Driver Rate Cost Driver Volume Resources Used Materials Energy Setups Purchasing Customer Service Long-term Labor Administrative 50 40 50 40 50 5,000 3,200 30 30 30 100 200 Resources Supplied Materials Energy Setups Purchasing Customer Service Long-term Labor Administrative $25,000 3,500 1,750 1,500 1,600 6,000 14,000