Chapter 2 Homework eBook Income Statement, Direct and Indirect Cost Concepts, Service Company Lakeesha Barnett owns and operates a package mailing store in a college town. Her store, Send It Packing, helps customers wrap items and send them via UPS, FedEx, and the USPS. Send It Packing also rents mailboxes to customers by the month. In May, purchases of materials (stamps, cardboard boxes, tape, Styrofoam peanuts, bubble wrap, etc.) equaled $11,350; the beginning inventory of materials was $1,150, and the ending inventory of materials was $950. Payments for direct labor during the month totaled $25,600. Overhead incurred was $18,200 (including rent, utilities, and insurance, as well as payments of $14,050 to UPS and FedEx for the delivery services sold). Since Send It Packing is a franchise, Lakeesha owes a monthly franchise fee of 5 percent of sales. She spent $2,750 on advertising during the month. Other administrative costs (including accounting and legal services and a trip to Dallas for training) amounted to $3,600 for the month. Revenues for May were $103,000. Required: 1. What was the cost of materials used for packaging and mailing services during May? $ > 2. What was the prime cost for May? 3. What was the conversion cost for May? 4. What was the total cost of services for May? $ 5. Prepare an income statement for May. Send it Packing Income Statement For the Month Ended May 31 Operating expenses: Check My Work 1 more Check My Work uses remaining. Assignment Score: 64.46% All work saved. Save and Exit CO Previous Next > Submit Assignment for Grading Chapter 2 Homework 2. What was the prime cost for May? $ 3. What was the conversion cost for May? $ eBook 4. What was the total cost of services for May? $ > 5. Prepare an income statement for May. Send it Packing Income Statement For the Month Ended May 31 Operating expenses: 6. Of the overhead incurred, is any of it direct? Of the overhead incurred, is any of it indirect? Check My Work 1 more Check My Work uses remaining. Assignment Score: 64.46% All work saved. Save and Exit Previous CO Next > Submit Assignment for Grading