Cost of Services Produced

Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 2.1 hours. On average, HHH completes about 21,000 cleanings per year. The following total costs are associated with the total cleanings:

Direct materials	?
Direct labor	$709,800
Variable overhead	29,400
Fixed overhead	33,600

Next year, HHH expects to purchase $62,000 of direct materials. Projected beginning and ending inventories for direct materials are as follows:

	Direct materials Inventory
Beginning	$4,400
Ending	3,000

There is no work-in-process inventory; in other words, a cleaning is started and completed on the same day.

Required:

1. Prepare a statement of services produced in good form. If an amount is zero, enter "0".

Happy Home Helpers, Inc.
Statement of Cost of Services Produced
For the Coming Year
Direct materials
	$
Materials available	$
Direct materials used in production		$
Total services production costs added		$
Cost of services produced		$

2. What if HHH planned to purchase $66,100 of direct materials? Assume there would be no change in beginning and ending inventories of materials. What effect would this have on cost of services produced?

Cost of services produced would by $

There is no work-in-process inventory; in other words, a cleaning is started and completed on the same day. Required: 1. Prepare a statement of services produced in good form. If an amount is zero, enter "0". Happy Home Helpers, Inc. Statement of Cost of Services Produced For the Coming Year Direct materials Materials available Direct materials used in production Total services production costs added Cost of services produced increase 2. What if HHH planned to purchase decrease direct materials? Assume there would be no change in beginning and ending inventories of materials. What effect would this have on cost of services produced? Cost of services produced would by $