Marcus Washington owns and operates three Compufix shops in the Chicago area.

Compufix repairs and upgrades computers on site. In May, purchases of materials equaled $9,350, the beginning inventory of materials was $1,050, and the ending inventory of materials was $750. Payments for direct labor during the month totaled

$18,570. Overhead incurred was $15,000. The Chicago shops also spent $5,000 on advertising during the month. Administrative costs (primarily accounting and legal services)

amounted to $3,000 for the month. Revenues for May were $60,400.

Required:

1. What was the cost of materials used for repair and upgrade services during May?

2. What was the prime cost for May?

3. What was the conversion cost for May?

4. What was the total cost of services for May?

5. Prepare an income statement for May.