The Marshall Company is a large manufacturer of office furniture. The company has recently adopted lean accounting and has identified two value streamsoffice chairs and

The Marshall Company is a large manufacturer of office furniture. The company has recently adopted lean accounting and has identified two value streams—office chairs and office tables. Total sales in the most recent period for the two streams are $245 and $310 million, respectively. In the most recent accounting period, Marshall had the following operating costs, which were traced to the two value streams as follows (in thousands).

 

Non-traceable costs:
Manufacturing			$116,750,000
SG&A			$25,000,000
Fixed mfg. cost from prior-period inventory in the current I/S:
Office-chair value stream			$5,500,000
Office-Table Value Stream			$22,500,000
Sales revenue--most recent period:
Office-chair value stream			$245,000,000
Office-Table Value Stream			$310,000,000

In addition to the traceable operating costs, the company had manufacturing costs of $116,750,000 and selling and administrative costs of $25 million that could not be traced to either value stream. Due to the implementation of lean methods, the firm has been able to reduce inventory in both value streams significantly and has calculated the fixed cost of prior period inventory that is included in the current income statement to be $5.5 million for the office chair stream and $22.5 million for the office table stream.

Required

Prepare the value stream income statement for MarshallCompany.

Chairs Tables Operating costs: $ 16,500 $14,500 Materials Labor 123,000 96,500 Equipment-related costs 44,500 62,800 Occupancy costs 11,350 12,600