Question
Baubee Meal Delivery Service (BMDS) provides restaurant to customer meal deliveries for food establishments in a suburban neighborhood. The company provides you with the
Baubee Meal Delivery Service (BMDS) provides restaurant to customer meal deliveries for food establishments in a suburban neighborhood. The company provides you with the following information for the third quarter of operations: Sales revenue $ 245,000 Variable costs of operations, excluding labor costs (note a) 62,500 Employee wages and salaries (note b) 66,500 Manager salaries (note c) 25,500 Fixed cost of delivery vans (note d) 17,500 Building costs (rent, utilities, etc.) (note e) IT costs including support (note f) 12,700 37,000 Notes: a. 15 percent of this cost was wasted due to poor directions given to delivery van drivers. b. 15 percent of this cost was for time spent by delivery van drivers because of poor directions. c. 15 percent of this cost was time taken to address customer complaints. d. The vans have 35 percent unused capacity. e. The building has 15 percent unused capacity. f. The IT system has 35 percent unused capacity. Required: a. Using the traditional income statement format, prepare a value income statement. b. What value would there be to the managers at BMDS from preparing the same information in the following quarters? Complete this question by entering your answers in the tabs below. < Prev 8 of 10 Next > MacBook Air Using the traditional income statement format, prepare a value income statement. Note: Loss amounts should be indicated with a minus sign. BAUBEE MEAL DELIVERY SERVICE Value Income Statement Sales revenue Cost of services sold: For the Quarter Ending September 30 Nonvalue-added Activities Value-added Activities Total $ 245,000 Variable costs of operations, excluding labor costs $ 62,500 (9,375) 53,125 Employee wages and salaries 66,500 (9,975) 36,575 Fixed cost of delivery vans Gross margin (loss) 25,500 (8,925) 16,575 $ (138,800) Administrative expenses: Managers' salaries Building costs IT costs including support Operating income (loss) 17,500 12,700 (1,905) 10,795 37,000 (12,950) 24,050 $ 86,455
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