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 0.9 hours. On average, HHH completes about 9,000 cleanings per year. The following total costs are associated with the total cleanings:

Direct materials	?
Direct labor	$313,200
Variable overhead	11,700
Fixed overhead	13,500

Next year, HHH expects to purchase $25,700 of direct materials. Projected beginning and ending inventories for direct materials are as follows:

	Direct materials Inventory
Beginning	$3,200
Ending	1,800

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

Required:

Question Content Area

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
Beginning inventoryBeginning work in processCleaning overheadDirect laborPurchases	$- Select -
Add: Cleaning overheadAdd: Direct laborAdd: Ending inventoryAdd: Ending work in processAdd: Purchases	- Select -
Materials available	$fill in the blank 30dc05005f98048_5
Less: Beginning inventoryLess: Cleaning overheadLess: Direct laborLess: Ending inventoryLess: Ending work in process	- Select -
Direct materials used in production		$fill in the blank 30dc05005f98048_8
Beginning work in processDirect laborEnding inventoryEnding work in processPurchases		- Select -
Beginning inventoryBeginning work in processCleaning overheadEnding inventoryPurchases		- Select -
Total services production costs added		$fill in the blank 30dc05005f98048_13
Add: Beginning work in processAdd: Cleaning overheadAdd: Direct laborAdd: Ending inventoryAdd: Ending work in process		- Select -
Less: Beginning work in processLess: Beginning inventoryLess: Direct laborLess: Ending inventoryLess: Ending work in process		- Select -
Cost of services produced		$fill in the blank 30dc05005f98048_18

Question Content Area

2. What if HHH planned to purchase $30,000 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

increasedecrease

by $fill in the blank b9d54afb6fc6fd4_2