Allocation Busters Assignment

Allocation Busters (AB) is a dispute mediation firm offering services to firms in disputes about cost allocations with government agencies. For March, AB worked 451 hours for Massive Airframes and 663 hours for Gigantic Drydocks. AB bills clients $199,600 in marketing and administrative costs. All transactions are on account.

All services that were billed professional staff are $210 per hour. Overhead costs in March totaled $40,080. Overhead is applied to clients at $40 per labor-hour. In addition, AB had t the rate of $513 per hour, labor cost for Transaction Description Record Labor cost vice Overhead Record Cost of services billed Record Actual Service Overhead (ci d) Required: a. Show labor and overhead cost flow through T-accounts. Wages Payable Work-In-Process Bea. bal. Beg. bal. C End. bal End, bal. Cost of Services Billed Service Overhead Control Beg. bal. Beg. bal End, bal End bal Applied Service O.H. Beg. bal End. bal. b. Prepare an income statement for the company for March ALLOCATION BUSTERS Income Statement For the Month Ended March 31 Service revenue Cost of services billed Subtract Overapplied service overhead Gross margin Marketing and administration Operating profit. .