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ription rd labor cost rd applied service overhead rd cost of services billed rd actual service overhead

ription rd labor cost rd applied service overhead rd cost of services billed rd actual service overhead

FINANCIAL ACCOUNTING
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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In October, Temptations Event Planners (TEP) planned events for two clients. TEP worked 144 hours for Ward Corporation and 244 hours for Girardin Industries. TEP bills clients at the rate of $370 per hour; labor cost for its planning staff is $160 per hour. The total number of hours worked in October was 388, and overhead costs were $15,800. Overhead is applied to clients at $32 per planner-hour. In addition, TEP had $28,000 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 an income statement for the company for October.
Transcribed Image Text:In October, Temptations Event Planners (TEP) planned events for two clients. TEP worked 144 hours for Ward Corporation and 244 hours for Girardin Industries. TEP bills clients at the rate of $370 per hour; labor cost for its planning staff is $160 per hour. The total number of hours worked in October was 388, and overhead costs were $15,800. Overhead is applied to clients at $32 per planner-hour. In addition, TEP had $28,000 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 an income statement for the company for October.
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