For August, Royal Consulting and Mediation Practice (RCMP)worked 900 hours for Alberta Company and 2,100 hours for OntarioCorporation. RCMP bills clients at the rate of $450 per hour; laborcost for its consulting staff is $250 per hour. The total number ofhours worked in August was 3,000, and overhead costs were $65,000.Overhead is applied to clients at $27 per labor-hour. In addition,RCMP had $265,000 in marketing and administrative costs. Alltransactions 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 throughT-accounts.
b. Prepare an income statement for the companyfor August
Please explain any calculations.
