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Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values. Pretax income ? ? Gross profit Allocated costs (uncontrollable) $2,030 Labor expense 41,590 Sales 188,000 Research and development (uncontrollable) 320 Depreciation expense 17,000 Net income/(loss) ? Cost of goods sold 118,440 Selling expense 1,240 Total expenses 2 Marketing costs (uncontrollable) 800 Administrative expense 690 Income tax expense (21% of pretax income) ? Other expenses 320 A. Prepare the income statement to include all costs, but separate out uncontrollable costs using the above information. Round your answers to the nearest dollar. BDS Enterprises Income Statement For the Year Ended December 31, 20xx Controllable Expenses: 000 0000 Total Controllable Expenses Incontrollablo Cenoncor: Uncontrollable Expenses: QUO|| Total Uncontrollable Expenses Total Expenses B. Calculate the profit margin, return on investment, and residual income, excluding uncontrollable expenses. Assume an investment base of $100,000 and 4% cost of capital. Round your percentage answers to one decimal place and residual income to the nearest dollar. Profit margin % Return on investment % Residual income C. Which of the following statements is correct? Uncontrollable costs are included in the income statement because a. these costs ultimately affect each division. b. these costs are the responsibility of each division manager. c. these costs are non-recurring. d. these costs are head office's responsibility

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