Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), ahouse-cleaning service. Each cleaning (cleaning one house one time) takes ateam of three house cleaners about 1.5 hours. On average, HHH completesabout 15,000 cleanings per year. The following total costs are associated withthe total cleanings:Direct materials?Direct labor$472,500Variable overhead15,000Fixed overhead18,000Next year, HHH expects to purchase $25,600 of direct materials. Projectedbeginning and ending inventories for direct materials are as follows:Direct Materials InventoryBeginning$4,000Ending2,600There is no work-in-process inventory and no finished goods inventory; inother words, a cleaning is started and completed on the same day.Required:1. Prepare a statement of cost of services sold in good form.2. How does this cost of services sold statement differ from the costof goods sold statement for a manufacturing firm?

Working note: Computation of direct material consumed: Amount Beginning direct materials…

Answered: Jean and Tom Perritz own and manage…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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