For August, Royal Consulting and Mediation Practice (RCMP) worked 900 hours for Alberta Company and 2,100 hours for Ontario Corporation. RCMP bills clients at the rate of $300 per hour; labor cost for its consulting staff is $150 per hour. The total number of hours worked in September was 3,000, and overhead costs were $45,000. Overhead is applied to clients at $18 per labor-hour.

In addition, RCMP had $180,000 in marketing and administrative costs. All transactions are on account. All services were billed.

Required

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

b. Prepare an income statement for the company for August.