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Operating Costs Assignment | Top Universities

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 $270 and $335 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): Chairs Tables Operating costs! Materials Labor equipment-related costs Occupancy costs $ 17,000 128,000 45,000 11,600 $15,000 99, cea 63,800 13,100
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In addition to the traceable operating costs, the company had manufacturing costs of $141.750 million, and selling and administrative costs of $30 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. Marshall has calculated the fixed cost of prior period inventory that is included in the current income statement to be $8.0 million for the office chair stream and $220 million for the office table stream. Required: Prepare, in good form (e, using Exhibit 1717 as a guide), the value-stream income statement for Marshall Company (Enter your answers in thousands of dollars.) Required: Prepare, in good form (i.e., using Exhibit 1717 as a guide), the value-stream income statement for Marshall Company. (Enter your answers in thousands of dollars.) MARSHALL COMPANY Value-Stream Income Statement (000s) Office Chairs Office Tables Sales Operating costs: Total operating costs Value-stream profit before inventory change 11 1 Value-stream profit Less: Nontraceable costs 1 Total nontraceable foxed costs Operating income EXHIBIT 17:17 Sample Value-Stream Income Statement RIMMER COMPANY Value-Stream Income Statement Digital Cameras Video Cameras Total Sales $585,000 $540,000 $1,125,000 Operating costs: Materials $ 25,200 $ 12,800 Labor 168,000 88,000 equipment-related costs 92.400 48,400 Occupancy costs _11.200 4.800 Total operating costs 296,800 154,000 450,800 Less: Other value-stream costs Manufacturing 120,000 240,000 Selling and administration 10.000 130.000 10.000 250.000 380.000 Value-stream profit before $ 158,200 $ 136,000 $ 294,200 inventory change Less: Cost of decrease in (10.000) _(20.000) –(30.000) inventory Value-stream profit $ 148,200 $ 116,000 $264 200 Less: Nontraceable costs Manufacturing $ 155,000 Selling and administration 54.000 Total nontraceable fixed $ 209.000 costs Operating income $ 55,200. Get Accounting Homework Help Today

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