Berry Company is an architectural firm. The firm is located in Detroit, Michigan, and employs ten professionals and five staff. The firm does design work for small and medium-size construction businesses. The following data are provided for the year ended July 31, 2001: lop25

Required:
1. Prepare a statement of cost of services sold.
2. Refer to the statement prepared in requirement 1. What is the dominant cost?
Will this always be true of service organizations? If not, provide an example of an exception.
3. Assume that the average fee for a design is $700. Prepare an income statement for Berry Company.
4. Discuss four differences between services and tangible.differences affect the computations in requirement 1?

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Designs processed Designs in process, July 31, 2000 Designs in process, July 31, 2001 Cost of services sold 2,000 $ 60,000 100,000 890,000 Beginning direct materials inventory 20,000 Purchases, direct materials 40,000 Direct labor 800,000 Overhead Administrative Selling 100,000 50,000 60,000