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): Operating costs: Materials Labor Equipment-related costs Occupancy costs Chairs $ 16,500 123,000 44,500 11,350 Tables $ 14,500 96,500 62,800 12,600 In addition to the traceable operating costs, the company had manufacturing costs of $116.750 million, 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. Marshall has calculated the fixed cost of prior-perlod 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. In good form (l.e.. using Exhibit 17.17 as a guide), the value-stream Income statement for Marshall Company. (Enter your
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): Operating costs: Materials Labor Equipment-related costs Occupancy costs Chairs $ 16,500 123,000 44,500 11,350 Tables $ 14,500 96,500 62,800 12,600 In addition to the traceable operating costs, the company had manufacturing costs of $116.750 million, 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. Marshall has calculated the fixed cost of prior-perlod 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. In good form (l.e.. using Exhibit 17.17 as a guide), the value-stream Income statement for Marshall Company. (Enter your
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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):
Operating costs:
Materials
Labor
Equipment-related costs
Occupancy costs
Sales
Operating costs:
Total operating costs
Value-stream profit before inventory change
In addition to the traceable operating costs, the company had manufacturing costs of $116.750 million, 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. Marshall 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.
Value-stream profit
Less: Nontraceable costs
Chairs
Required:
Prepare, in good form (l.e., using Exhibit 17.17 as a guide), the value-stream Income statement for Marshall Company. (Enter your
answers in thousands of dollars.)
Total nontraceable fixed costs
$ 16,500
123,000
44,500
11,350
Operating income
Tables
$ 14,500
96,500
62,800
12,600
MARSHALL COMPANY
Value-Stream Income Statement (000s)
Office Tables
Office Chairs
$
0
$
0
$
S
0 S
SS
S
Total
0
0
0
0
0
0
0
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