Prepare an income statement by division and by product for the month ended August 31, 2013.

Wilke’s Tool-a-Rama manufactures small tools and tool sets. The company utilizes a shared warehouse facility that stores the inventory. The Small Tools division uses 150,000 square feet of the warehouse and the Tool Set division uses 100,000 square feet of the warehouse. The total cost of the warehouse facility was $30,000, of which $25,000 are traceable fixed costs. Further, the Small Tools division has two main products: wrenches and screwdrivers. The wrenches use 60,000 square feet of the warehouse and the screwdrivers use 75,000 square feet. The remaining 15,000 square feet is used by the Small Tools division manager, so it isn’t traceable to either Small Tools division product. Additionally, income and expense data for each division for the month of August 2013 follows.

Additional data:	Small Tools	Tool Set
	Wrenches	Screwdrivers
Sales revenue	$65,000	$35,000	$140,000
Variable cost of goods sold	31,200	16,800	56,000
Fixed cost of goods sold	12,000	8,000	25,000
Variable selling expenses	8,000	10,000	13,000

Requirements

1. Calculate the cost per square foot for the warehouse facility and show the cost used by each division. Calculate the cost used by each product of the Small Tools division.

2. Prepare an income statement by division and by product for the month ended August 31, 2013.