Allocation Busters (AB) is a dispute mediation firm offering services to firms in disputes about cost allocations with government agencies. For March, AB worked 450 hours for Massive Airframes and 670 hours for Gigantic Drydocks. AB bills clients at the rate of $515 per hour; labor cost for its professional staff is $210 per hour. Overhead costs in March totaled $40,050. Overhead is applied to clients at $44 per labor-hour. In addition, AB had $199,500 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.

Complete this question by entering your answers in the tabs below.

• Required A
• Required B

Show labor and overhead cost flows through T-accounts.

Wages Payable					Work-In-Process
Beg. bal.					Beg. bal.
End. bal.	0
					End. bal.	0
Cost of Services Billed					Service Overhead Control
Beg. bal.					Beg. bal.
End. bal.	0				End. bal.	0
Applied Service O.H.
Beg. bal.
End. bal.	0

• Required A
• Required B

Complete this question by entering your answers in the tabs below.

• Required A
• Required B

Prepare an income statement for the company for March.

ALLOCATION BUSTERS
Income Statement
For the Month Ended March 31