please solve both parts correctly with all working answer in text Problem 1-48 (Static) Cost Data for Managerial Purposes (LO 1-3)Holborn Appliance Shop is a small business located on the coast. It specializes in appliance repair and is known in the area for fast,reliable, and friendly service. Katie Holborn, the owner and primary repair specialist, has been working with appliances since shelearned about them helping her father in his shop. After teaching a class on appliance repair at the local technical college, Katie thinksshe might be able to develop a training business to complement the shop's repair work. Katie has put together some estimates on theimpact of a training program on revenues and costs. She estimates that revenues would grow by about 30 percent. Parts costs (mostlyfor demonstration machines) would increase by about 10 percent and labor costs by about 50 percent. The rent, which is based onrevenue, would also increase by about 30 percent. Utilities would increase by about 30 percent and insurance costs by 18 percent.Other costs would increase by 20 percent. Using her spreadsheet skills, Katie puts together the following estimated annual incomestatement assuming she offers both repair and training services.Required:a-1. Prepare an income statement for repair service only.a-2. Based on the financial impact, should Katie add training to her current repair business?Complete this question by entering your answers in the tabs below.Req A1Req A2Prepare an income statement for repair service only.Holborn Appliance ShopAnnual Income StatementRepair andTraining Service$474,500Sales revenueCostsPartsLaborRentUtilitiesInsuranceOther costsTotal costsOperating profit (loss)$$110,000180,00052,00039,0004,130Repair ServiceOnly21,600406,730 $67,770< Req A10Req A2 >

The income statement offers important information about a company's overall profitability, capacity…

Holborn Appliance Shop is a small business located on the coast. It specializes in appliance repair and is known in the area f reliable, and friendly service. Katie Holborn, the owner and primary repair specialist, has been working with appliances since earned about them helping her father in his shop. After teaching a class on appliance repair at the local technical college, Ka she might be able to develop a training business to complement the shop's repair work. Katie has put together some estimat mpact of a training program on revenues and costs. She estimates that revenues would grow by about 30 percent. Parts cos for demonstration machines) would increase by about 10 percent and labor costs by about 50 percent. The rent, which is bas revenue, would also increase by about 30 percent. Utilities would increase by about 30 percent and insurance costs by 18 pe Other costs would increase by 20 percent. Using her spreadsheet skills, Katie puts together the following estimated annual i statement assuming she offers both repair and training services.

Holborn Appliance Shop is a small business located on the coast. It specializes in appliance repair and is known in the area f reliable, and friendly service. Katie Holborn, the owner and primary repair specialist, has been working with appliances since earned about them helping her father in his shop. After teaching a class on appliance repair at the local technical college, Ka she might be able to develop a training business to complement the shop's repair work. Katie has put together some estimat mpact of a training program on revenues and costs. She estimates that revenues would grow by about 30 percent. Parts cos for demonstration machines) would increase by about 10 percent and labor costs by about 50 percent. The rent, which is bas revenue, would also increase by about 30 percent. Utilities would increase by about 30 percent and insurance costs by 18 pe Other costs would increase by 20 percent. Using her spreadsheet skills, Katie puts together the following estimated annual i statement assuming she offers both repair and training services.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 1CE: Ventana Window and Wall Treatments Company provides draperies, shades, and various window...

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