Allocation Busters (AB) is a dispute mediation firm offeringservices to firms in disputes about cost allocations withgovernment

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Question:

Allocation Busters (AB) is a dispute mediation firm offeringservices to firms in disputes about cost allocations withgovernment agencies. For March, AB worked 447 hours for MassiveAirframes and 680 hours for Gigantic Drydocks. AB bills clients atthe rate of $504 per hour; labor cost for its professional staff is$200 per hour. Overhead costs in March totaled $41,360. Overhead isapplied to clients at $42 per labor-hour. In addition, AB had$198,600 in marketing and administrative costs. All transactionsare 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 flowsthrough T-accounts.

b. Prepare an income statement for thecompany for March.

Required ARequired BShow labor and overhead cost flows through T-accounts.Wages PayableWork-In-ProcessBeg. bal.Beg. bal Prepare an income statement for the company for March.ALLOCATION BUSTERSIncome StatementFor the Month Ended March 31