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Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Direct materials ? Direct labor $523,500 Variable overhead 19,500 Fixed overhead 22,500 Next year, HHH expects to purchase $38,300 of direct materials. Projected beginning and ending inventories for direct materials are as follows: Direct materials Inventory Beginning $4,100 Ending 2,700 There is no work-in-process inventory; in other words, a cleaning is started and completed on the same day. 1. Prepare a statement of services produced in good form. If an amount is zero, enter "0". Happy Home Helpers, Inc. Statement of Cost of Services Produced For the Coming Year Direct materials Materials available $ Direct materials used in production Total services production costs added QUI0000 Cost of services produced 2. What if HHH planned to purchase $42,500 of direct materials? Assume there would be no change in beginning and ending inventories of materials. What effect would this have on cost of services produced? Cost of services produced would by Beginning inventory Beginning work in process Cleaning overhead Direct labor Purchases Add: Cleaning overhead Add: Direct labor Add: Ending inventory Add: Ending work in process Add: Purchases Less: Beginning inventory Less: Cleaning overhead Less: Direct labor Less: Ending inventory Less: Ending work in process Beginning work in process Direct labor Ending inventory Ending work in process Purchases Beginning inventory Beginning work in process Cleaning overhead Ending inventory Purchases Add: Beginning work in process Add: Cleaning overhead Add: Direct labor Add: Ending inventory Add: Ending work in process Less: Beginning work in process Less: Beginning inventory Less: Direct labor Less: Ending inventory Less: Ending work in process