Activity-based reporting. The Halloway Corporation manufactures oxygen tanks for deepsea divers. Information regarding resources for the month of March follows. In addition, $22,000 was spent on 800...

Activity-based reporting. The Halloway Corporation manufactures oxygen tanks for deepsea divers. Information regarding resources for the month of March follows.

In addition, $22,000 was spent on 800 quality inspections with a cost driver rate of $25, and $8,000 was spent on 200 customer-service cost driver units with a cost driver rate of $30.

Sales for March were $350,000. Management has requested that you

a. Prepare a traditional income statement.

b. Prepare an activity-based income statement.

c. Write a short report explaining why the activity-based income statement provides better information to managers. Use information for Halloway Corporation in examples.