Allocation Busters (AB) is a dispute mediation firm offering services to firms in disputes about cost allocations with government agencies. For March, AB worked 457 hours for Massive Airframes and 674 hours for Gigantic Drydocks. AB bills clients at the rate of $511 per hour; labor cost for its professional staff is $210 per hour. Overhead costs in March totaled $41,500. Overhead is applied to clients at $40 per labor-hour. In addition, AB had $199,100 in marketing and administrative costs. All transactions are on account. All services were billed.

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 March.

Wages payable

Beg.bal
End. Bal	0

Cost of services billed

Beg:bal
End. Bal.

applied service O.H

Beg. bal.
End. bal.

Work-In-Process

Beg.bal

End. Bal

Service Overhead Control

Beg.bal
End.bal	0

B

Prepare an income statement for the company for March

	ALLOCATION BUSTERS Income Statement For the Month Ended March 31