Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher

تمرين 5

Job Costing in a Service Organization
For August, Royal Consulting and Mediation Practice (RCMP) worked 900 hours for Alberta Company and 2,100 hours for Ontario Corporation. RCMP bills clients at the rate of $210 per hour; labor cost for its consulting staff is $105 per hour. The total number of hours worked in September was 3,000, and overhead costs were $30,000. Overhead is applied to clients at $18 per labor-hour. In addition, RCMP had $126,000 in marketing and administrative costs. All transactions are on account. All services were billed.
Required
a. Show labor and overhead cost flows through T-accounts.
b. Prepare an income statement for the company for August.