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Job Costing in a Service Organization

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For August, Busters Consulting and Mediation Practice(BCMP) worked 900 hours for Quebec company and 2,100 hours for Ontario Corporation. BCMP bills clients at the rate of $300 per hour; labor cost for it's consulting staff is $150 per hour. The total number of hours worked in September was 3,000, and overhead costs were $45,000. Overhead is applied to clients at $18 per labor-hour. In addition, BCMP had $180,000 in marketing and administrative costs. All transactions are on account. All services were billed.

a. Show labor and overhead cost flows through t-accounts.
b. Prepare an income statement for the company for August.

(USE EXCEL SHEETS)

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Solution Summary

I put the T accts and some discussion in excel as well as the income statement for you. You can find the computations in the cells.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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