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Exercise $7-45($Algo$)$ Job Costing in a Service Organization $($LO $7-4)$

Farnsworth Executive Coaching $($FEC$)$ offers services to firms in advising executives on improving productivity and leadership. For August, FEC worked $694$ hours for Grace Corporation and $424$ hours for Temple Construction. In addition, FEC had small engagements with various clients totaling $159$ hours. FEC bills clients at the rate of $$770$ per hour; labor cost for its professional staff is $$445$ per hour. Overhead costs in August totaled $$74,900.$ Overhead is applied to clients at $$65$ per labor$-$hour. In addition, FEC had $$180,100$ in marketing and administrative costs. All transactions are on account. All services were billed.

$\backslash$table$[[$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 August.

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

Required $A$

Required B

Show labor and overhead cost flows through T$-$accounts.

$\backslash$table$[[$Wages Payable,,$],[$Beginning balance,,Credit$],[,,($a$),]]$

$\backslash$table$[[$Work$-$in$-$Process,$],[$Beginning balance,,Credit$],[($a$),,($c$),]]$

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