Cost Accumulation: Service (L.O. 4)

Youth Athletic Services (YAS) provides adult supervision for organized youth athletics. It has a president, William Mayes, and five employees. He and one of the other five employees manage all marketing and administrative duties. The remaining four employees work directly on operations. XS YAS has four service departments: managing, officiating, training, and dispute resolution. A time J card is marked, and records are kept to monitor the time each employee spends working in each department. When business is slow, there is idle time, which is marked on the time card. (It is necessary to have some idle time because some direct labor-hours must be available to accommodate fluctuating peak demand periods throughout the day and the week.)

Some of the July operating data are as follows

Required :
Management wants to know whether each department is contributing to the company’s profit. Prepare an income statement for July that shows the revenue and cost of services for each department.
Write a short report to management about departmental profitability. No inventories are kept.

Transcribed Image Text:

Dispute Idle Time Managing Officiating Training Resolution Sales revenue $6,950 $7,900 $3,000 $1,000 Direct labor (in hours). 25 320 80 125 90 Direct overhead traceable to departments Equipment Supplies $950 $ 875 $700 $ 10 200 300 250 200 Transportation 375 1,000 150 50