bob daniels manages an auto dealership s service department the recent month s incom 648482
Bob Daniels manages an auto dealership’s service department. The recent month’s income statement for his department follows. (1) Analyze the items on the income statement and identify those that definitely should be included on a performance report used to evaluate Daniels’s performance. List them and explain why you chose them. (2) List and explain the items that should definitely be excluded. (3) List the items that are not definitely included or excluded and explain why they fall into that category.
|
Revenues |
|
|
|
Sales of parts |
$ 144,000 |
|
|
Sales of services |
210,000 |
$354,000 |
|
Costs and expenses |
|
|
|
Cost of parts sold |
60,000 |
|
|
Building depreciation |
18,600 |
|
|
Income taxes allocated to department |
17,400 |
|
|
Interest on long term debt |
15,000 |
|
|
Manager’s salary |
24,000 |
|
|
Payroll taxes |
16,200 |
|
|
Supplies |
31,800 |
|
|
Utilities |
8,800 |
|
|
Wages (hourly) |
32,000 |
|
|
Total costs and expenses |
|
223,800 |
|
Departmental net income |
|
$130,200 |