Brigade Builders, Inc. designs decks, gazebos, and play equipment for residential homes. The following was provided for the year ended September 30, 2018: Direct labor $800,000

Direct material purchases 80,000

Administrative expenses 155,000

Overhead 95,000

Selling expenses 325,000

Beginning direct materials inventory 43,000

Beginning designs in process 21,000

Ending direct materials inventory 18,000

Ending designs in process 45,000

The average design fee is $900. There were 3,500 designs processed during the year.

Required: a. Prepare a statement of cost of services sold. b. Prepare an income statement. c. Discuss three differences between services and tangible products.