Question:
Value Income Statement
Paul's Limo Service has the following information for June:
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1
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A
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B
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C
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D
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2
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Sales revenue
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$ 50,000
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3
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Variable costs of operations, excluding labor costsa
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15,000
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4
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Employee wages and salariesb
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20,000
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5
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Manager salariesc
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4,000
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6
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Fixed cost of automobilesd
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5,000
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7
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Building costs (rent, utilities, etc.)e
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2,500
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8
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9
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a5 percent of this cost was wasted due to poor directions given to limo drivers.
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10
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b5 percent of this cost was for time spent by limo drivers because of poor directions.
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11
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c10 percent of this cost was time taken to address customer complaints.
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12
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dThe limos have 40 percent unused capacity.
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13
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eThe building has 10 percent unused capacity.
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14
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Required
a. Using the traditional income statement format, prepare a value income statement.
b. What value would there be to Paul from preparing the same information in July?