Prepare income statement using traditional method for the year ended

Laura subscribes to the relevant trade journals in dairy farming, and has excerpted the following information from a recent issue of one of her journals. It shows the buying criteria of a sample of supermarket customers who were purchasing milk in plastic and paper containers (1 = most important, and 5 = least important). The current supermarket prices for these products in Maple Hill's area are $1.25 per quart for each product except eggnog which sells for $1.80. Supermarkets mark up the price of milk by about 40% from dairy cost, so the price received by the dairy is somewhat less

Maple Hill has a conventional accounting system which keeps track of overhead costs in four categories: bottling equipment, facilities, processing, and general and administrative. There are sub-accounts in each of these accounts except for bottling equipment. The accounts, sub-accounts and costs for the most recent operating year are shown in Table 1. These costs are often called resource costs, and are labeled as such inthe OROS software system. Maple Hill grows on site most of the feed needed at the dairy farm. The cost of producing the feed and some additional feed purchased during the year is included under labor and materials for other processing cost

In addition to the overhead costs, Maple Hill has direct costs for bottles and other materials. These materials are purchased from a variety of suppliers. Each glass bottle costs Maple Hill $.75, including both purchase and recycling cost. Other ingredients include cocoa, sugar, and spices. Cocoa, used in the production of chocolate milk, costs $.05 per bottle. Sugar, used in both chocolate milk and eggnog, costs $.05 per bottle. Spices, used to make eggnog, cost $.08 per bottle. In total, 65,700 ounces of sugar and cocoa were used in the production of chocolate milk, and 76,650 ounces of sugar and spice were used in the production of eggnog

Table 1: Overhead (Resource) Costs for Maple Hill Dairy Farm ACCOUNTS SUB ACCOUNTS ACTUAL COSTS Bottling Equipment $1,528,620 Other Facilities Costs Utilities 72,395 Depreciation 22,976 Property Tax 10,014 Total Other Facilities Cost $105,385 Other Processing Costs Labor and materials 428,800 Supplies 4,278 Equipment repairs and maintenance 21,565 Depreciation 13,688 Total Other Processing Cost 468,331 General and Administrative Administration 105,522 Interest Expense 23,471 Total General and Administrative 128.993 Total 2,231,329The products produced by Maple Hill and current prices received by Maple Hill are as follows: Whole Milk, $1.90 per quart Low-Fat Milk, $1.90 Skim Milk, $1.90 Chocolate Milk, $1.90 Eggnog, $2.25 Bottles are produced in one size - quarts. Selected data for the most recent year are as follows: Whole Milk Low-Fat Milk Skim Milk Chocolate Milk Eggnog 145 500 333 455 525 Number of Invoices 292,000 730,000 511,000 219,000 187,000 Number of Bottles Produced 373 933 653 290 270 Number of Purchase Orders 48 66 85 71 43 Number of Customers 166 304 236 144 135 Labor Hours, Warehousing 2 2 3 3 4 Number of Quality Checks per Order 87 422 345 132 112 Machine Hours, Separating 0 0 0 385 355 Machine Hours, Mixing 199 433 312 187 177 Machine Hours, Bottling 98 312 177 88 122 Labor Hours, Clean and Repair