Question: How does this cost of services sold statement differ from the cost of goods sold statement for a manufacturing firm? Jean and Tom Perritz own
How does this cost of services sold statement differ from the cost of goods sold statement for a manufacturing firm? 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: Next year. HHH expects to purchase $25.600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. HHH expects to sell 15.000 cleanings at a price of $45 each next year. Total selling expense is projected at $22,000, and total administrative expense is projected at $53,000. Required: Prepare an income statement in good form. What if Jean and Tom increased the price to $50 per cleaning and no other information was affected? Explain which line items in the income statement would be affected and how
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