For August, Royal Consulting and Mediation Practice (RCMP) worked 600 hours for Alberta Company and 1,500 hours for Ontario Corporation. RCMP bills clients at the rate of $500 per hour; labor cost for its consulting staff is $300 per hour. The total number of hours worked in August was 2,100, and overhead costs were $50,000. Overhead is applied to clients at $29 per labor-hour. In addition, RCMP had $290,000 in marketing and administrative costs. All transactions are on account. All services were billed. Transaction (a) (b) (c) (d) Required: a. Show labor and overhead cost flows through T-accounts. Wages Payable Beg, bal. End, bal. Beg, bal. End, bal. Beg, bal. Description Record Labor cost Record Applied Service Overhead Record Cost of services billed Record Actual Service Overhead End hal 0 Cost of Services Billed Applied Service O.H. 0 Beg. bal. End. bal. Beg. bal. End. bal. Work-in-Process 0 Service Overhead Control 0
For August, Royal Consulting and Mediation Practice (RCMP) worked 600 hours for Alberta Company and 1,500 hours for Ontario Corporation. RCMP bills clients at the rate of $500 per hour; labor cost for its consulting staff is $300 per hour. The total number of hours worked in August was 2,100, and overhead costs were $50,000. Overhead is applied to clients at $29 per labor-hour. In addition, RCMP had $290,000 in marketing and administrative costs. All transactions are on account. All services were billed. Transaction (a) (b) (c) (d) Required: a. Show labor and overhead cost flows through T-accounts. Wages Payable Beg, bal. End, bal. Beg, bal. End, bal. Beg, bal. Description Record Labor cost Record Applied Service Overhead Record Cost of services billed Record Actual Service Overhead End hal 0 Cost of Services Billed Applied Service O.H. 0 Beg. bal. End. bal. Beg. bal. End. bal. Work-in-Process 0 Service Overhead Control 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:For August, Royal Consulting and Mediation Practice (RCMP) worked 600 hours for Alberta Company and 1,500 hours for Ontario Corporation. RCMP bills clients at the rate of $500 per
hour; labor cost for its consulting staff is $300 per hour. The total number of hours worked in August was 2,100, and overhead costs were $50,000. Overhead is applied to clients at $29 per
labor-hour. In addition, RCMP had $290,000 in marketing and administrative costs. All transactions are on account. All services were billed.
Transaction Description
(a)
(b)
(c)
(d)
Required:
a. Show labor and overhead cost flows through T-accounts.
Beg. bal.
End. bal.
Beg, bal.
End. bal.
Beg. bal.
Record Labor cost
Record Applied Service Overhead
Record Cost of services billed
Record Actual Service Overhead
End. bal.
Wages Payable
0
Cost of Services Billed
0
Applied Service O.H.
0
Beg. bal.
End. bal.
Beg. bal.
End. bal.
Work-In-Process
0
Service Overhead Control
0
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