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

Direct purchases of material 80,000

Administrative expenses 155,000

General expenses 95,000

Selling expenses 325,000

Beginning inventory of direct materials 43,000

Initial designs in progress 21,000

Ending inventory of direct materials 18,000

Final designs in process 45,000

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

Required: 

a. Prepare a statement of cost of services sold. 

b. Prepare an income statement. 

C. Discuss three differences between services and tangible products.