Problem 7-63 (Algo) Job Costs: Service Company (LO 7-4) Rutland Business Services (RBS) provides miscellaneous consulting and services to local businesses. In August, RBS worked for three clients. It worked 270 hours for Selden Contracting, 170 hours for Moenhart Insurance, and 230 hours for Englewood Medical Center. RBS bills clients at $551 an hour; its labor costs are $142 an hour. A total of 750 hours were worked in August with 80 hours not billable to clients. Overhead costs of $72,750 were incurred and were assigned to clients on the basis of direct labor-hours. Because 80 hours were not billable, some overhead was not assigned to jobs. RBS had $60,400 in marketing and administrative costs. All transactions were on account. Required: a. What are the revenue and cost per client? b. Prepare an income statement for August.
Problem 7-63 (Algo) Job Costs: Service Company (LO 7-4) Rutland Business Services (RBS) provides miscellaneous consulting and services to local businesses. In August, RBS worked for three clients. It worked 270 hours for Selden Contracting, 170 hours for Moenhart Insurance, and 230 hours for Englewood Medical Center. RBS bills clients at $551 an hour; its labor costs are $142 an hour. A total of 750 hours were worked in August with 80 hours not billable to clients. Overhead costs of $72,750 were incurred and were assigned to clients on the basis of direct labor-hours. Because 80 hours were not billable, some overhead was not assigned to jobs. RBS had $60,400 in marketing and administrative costs. All transactions were on account. Required: a. What are the revenue and cost per client? b. Prepare an income statement for August.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 7-63 (Algo) Job Costs: Service
Company (LO 7-4)
Rutland Business Services (RBS) provides
miscellaneous consulting and services to
local businesses. In August, RBS worked for
three clients. It worked 270 hours for
Selden Contracting, 170 hours for
Moenhart Insurance, and 230 hours for
Englewood Medical Center. RBS bills
clients at $551 an hour; its labor costs are
$142 an hour. A total of 750 hours were
worked in August with 80 hours not
billable to clients. Overhead costs of
$72,750 were incurred and were assigned
to clients on the basis of direct labor-hours.
Because 80 hours were not billable, some
overhead was not assigned to jobs. RBS
had $60,400 in marketing and
administrative costs. All transactions were
on account.
Required:
a. What are the revenue and cost per
client?
b. Prepare an income statement for August.
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