Allocation Busters (AB) is a dispute mediation firm offering services to firms in disputes about cost allocations with government agencies. For March, AB worked 440 hours for Massive Airframes and 660 hours for Gigantic Drydocks. AB bills clients at the rate of $500 per hour; labor cost for its professional staff is $200 per hour. Overhead costs in March totaled $42,000. Overhead is applied to clients at $40 per labor-hour. In addition, AB had $200,000 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.

PART A

Show labor and overhead cost flows through T-accounts.

*Please note only fields with blue arrows are fillable.

*Columns A and D are dropdown menus for transactions (a) - closing

**please see examples*

PART B

Prepare an income statement for the company for March.

*Please note only fields with blue arrows are fillable

*Dropdown menu options for rows 1,2,5:

- Applied service overhead

- Cost of goods sold

- Cost of services billed

- Marketing and administration

- Service revenue

- Wages payable

- Work in process

Row 3

- Add: Overapplied service overhead

- Subtract: Overapplied service overhead

Row 4

- Gross loss

- Gross margin

Row 6

- Operating loss

- Operating profit

**Please see example**

Required A Required B Show labor and overhead cost flows through T-accounts. Wages Payable Beg. bal. 0 @ (a) ( (c) (d) Closing Cost of Services Billed End. bal. 0 Required A Required B Show labor and overhead cost flows through T-accounts. Wages Payable Beg. bal. End. bal. 0 (a) (b) (c) (d) Cost of Services Billed Beg. bal. Closing 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. End. bal. 0 Cost of Services Billed Service Overhead Control Beg. bal. Beg. bal. End. bal. End. bal. Applied Service O.H. Beg. bal. End. bal. 0 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 Applied service overhead Cost of goods sold Cost of services billed Marketing and administration Jired A Required 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