Allocation Busters (AB) s a dispute mediation firm offering services to firms in

Question

Allocation Busters (AB) s a dispute mediation firm offering services to firms in disputes about cost allocations with government agencies. For March, AB worked 455 hours for Massive Airframes and 675 hours for Gigantic Drydocks. AB bills clients at the rate of $508 per hour; labor cost for its professional staff is $220 per hour. Overhead costs in March totaled $41,980. Overhead is applied to clients at $45 per labor-hour. In addition, AB had $199,800 in marketing and administrative costs. All transactions are on account. All services were billed. Transaction Description Record Labor cost Record Applied Service Overhead Record Cost of services billed Record Actual Service Overhead (d) Required: a. Show labor and overhead cost flows through T-accounts

Explanation / Answer

Wages payable Work-in-process Debit Credit Debit Credit Beg.bal. 0 Beg.bal. 0 (a) 248600 (a) 248600 0 248600 (b) (455+675)*45 50850 End.Bal 248600 © 299450 299450 299450 End.Bal. 0 Cost of services billed Service overhead control Debit Credit Debit Credit Beg.bal. 0 Beg.bal. 0 © 299450 (d) 41980 299450 0 41980 0 End.Bal 299450 End.Bal 41980 Applied service overhead Accounts payable Debit Credit Debit Credit Beg.bal. 0 Beg.bal. 0 (b) (455+675)*45 50850 (d) 41980 0 50850 0 41980 End.Bal 50850 End.Bal 41980

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.