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Question - For August, Royal Consulting and Mediation Practice (RCMP) worked 800 hours for Alberta Company and 2,000 hours for Ontario Corporation. RCMP bills clients at the rate of $430 per hour; labor cost for its consulting staff is $230 per hour. The total number of hours worked in August was 2,800, and overhead costs were $63,000. Overhead is applied to clients at $30 per labor-hour. In addition, RCMP had $255,000 in marketing and administrative costs. All transactions are on account. All services were billed.
Transaction Description
(a) Record Labor cost
(b) Record Applied Service Overhead
(c)Record Cost of services billed
(d) Record Actual Service Overhead
Required -
a. Show labor and overhead cost flows through T-accounts
b. Prepare the income statement for the company for August.
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