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NOP currently uses labor costs to allocate all overhead, but management is considering implementing an...

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Accounting

NOP currently uses labor costs to allocate all overhead, but management is considering implementing an activity-based costing
system. After interviewing the sales and production staff, management decides to allocate administrative costs on the basis of direct
labor costs but to use the following bases to allocate the remaining costs:
Required:
a. Prepare the product line income statement using the proposed activity bases.
c. Restate the product line income statement for Normandy Office Products using direct labor costs as the only overhead allocation
base.NORMANDY OFFICE PRODUCTS
Income Statement
Manager Executive Total
Sales revenue $ 1,113,600 $ 1,235,400 $ 2,349,000
Direct materials 197,200208,800406,000
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