Rutland Business Services (RBS) provides miscellaneous consulting and services to local businesses. In August, RBS workedfor three clients. It worked 270 hours for Selden Contracting, 170 hours for Moenhart Insurance, and 230 hours for EnglewoodMedical Center. RBS bills clients at $524 an hour; its labor costs are $133 an hour. A total of 750 hours were worked in Augustwith 80 hours not billable to clients. Overhead costs of $66,000 were incurred and were assigned to clients on the basis ofdirect labor-hours. Because 80 hours were not billable, some overhead was not assigned to jobs. RBS had $58,600 inmarketing and administrative costs. All transactions were on account.Required:a. What are the revenue and cost per client?b. Prepare an income statement for August.Complete this question by entering your answers in the tabs below.Required A Required BWhat are the revenue and cost per client?RevenueLaborOverheadMarginSeldenContracting$MoenhartInsurance0 $EnglewoodMedical Center0 $<Required A0Required B >

Revenue: Revenue, often referred to as sales or income, is the total amount of money earned by a…

Answered: Rutland Business Services (RBS)…

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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Heidt Cleaning Services (HCS) is a local custodial service company serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business seems only marginally profitable. Twenty-five employees worked a total of 45,300 hours last year, 30,200 on commercial jobs and 15,100 on residential jobs. Wages were $20 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor-hours worked, which is also the basis for customer charges. Given current economic conditions and competition, HCS bills residential clients $40 per hour and commercial clients $30 per hour. Required: If overhead for the year was $404,580, what were the profits of the residential and commercial services using labor-hours as the allocation base? Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar. Overhead consists of costs of supervision,…
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