Leidenheimer Corporation manufactures small airplane propellers. Sales for year 2 totaled $1,780,000. Information regarding resources for the month follows.

Resources Used Resources Supplied

Parts management $62,000 $71,000

Energy 102,000 102,000

Quality inspections 94,000 106,000

Long-term labor 48,000 73,000

Short-term labor 35,000 59,000

Setups 138,000 210,000

Materials 320,000 320,000

Depreciation 130,000 210,000

Marketing 140,000 160,000

Customer service 21,000 37,000

Administrative 114,000 145,000

In addition, Leidenheimer spent $55,000 on 50 engineering changes with a cost-driver rate of $1,100 and $60,000 on 8 outside contracts with a cost driver rate of $7,500.

Required:

Management has requested that you do the following:

a.Prepare a traditional income statement.

b.Prepare an activity-based income statement.