Exercise $7-44($Static$)$ Job Costing in a Service Organization $($LO $7-$

In October, Temptations Event Planners $($TEP$)$ planned events for two clients. TEP

worked $140$ hours for Ward Corporation and $240$ hours for Girardin Industries. TEP bills

clients at the rate of $$350$ per hour; labor cost for its planning staff is $$140$ per hour.

The total number of hours worked in October was $380,$ and overhead costs were

$$15,600.$ Overhead is applied to clients at $$32$ per planner$-$hour. In addition, TEP had

$$27,000$ in marketing and administrative costs. All transactions 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 through T$-$accounts.

b$.$ Prepare an income statement for the company for October.

Complete this question by entering your answers in the tabs below.

Required A

Required B

Prepare an income statement for the company for October.