Sara Collier, the bookkeeper for Danner, Cheney, and Howe, a political consulting firm, has recently completed an accounting course at her local college. One of the topics covered in the course was the cost of goods manufactured schedule. Sara wondered if such a schedule could be prepared for her firm. She realized that, as a service-oriented company, it would have no Work in Process inventory to consider.

Listed below are the costs her firm incurred for the month ended August 31, 2010.

Supplies used on consulting contracts.........$ 1,200

Supplies used in the administrative offices ........1,500

Depreciation on equipment used for contract work ......900

Depreciation used on administrative office equipment.....1,050

Salaries of professionals working on contracts ......12,600

Salaries of administrative office personnel ......... 7,700

Janitorial services for professional offices.......... 400

Janitorial services for administrative offices ......... 500

Insurance on contract operations............ 800

Insurance on administrative operations .......... 900

Utilities for contract operation..............1,400

Utilities for administrative offices ...........1,300

Instructions

(a) Prepare a schedule of cost of contract services provided (similar to a cost of goods manufactured schedule) for the month.

(b) For those costs not included in (a), explain how they would be classified and reported in the financial statements.