eBook Question Content Area Income Statement, Cost of Services Provided, Service Attributes Mason, Durant, and Santos (MDS) is a tax services firm. The firm is located in Oklahoma City and employs 15 professionals and eight staff. The firm does tax work for small businesses and well-to-do individuals. The following data are provided for the last fiscal year. (The Mason, Durant, and Santos fiscal year runs from July 1 through June 30.) Returns processed 3,000 Returns in process, beginning of year 45,000 Returns in process, end of year 14,000 Cost of services sold $1,581,000 Beginning direct materials inventory 20,000 Purchases, direct materials 40,000 Direct labor 1,400,000 Overhead 100,000 Administrative expenses 255,000 Selling expenses 65,000 Required: Question Content Area 1. Prepare a statement of cost of services sold. Mason, Durant, and Santos Statement of Cost of Services Sold For the Year Ended June 30 Direct materials used $Direct materials used - Select - - Select - $- Select - - Select - - Select - Cost of services sold $fill in the blank 64f68b00cfed009_13 Question Content Area 2. Refer to the statement prepared in Requirement 1. What is the dominant cost? Will this always be true of service organizations? The situation above might be the case because: Feedback Area Feedback 2. Dominant=largest. Service organizations vary greatly in the composition of their costs. Question Content Area 3. Assuming that the average fee for processing a return is $850, prepare an income statement for Mason, Durant, and Santos. Mason, Durant, and Santos Income Statement For the Year Ended June 30 $- Select - - Select - $- Select - Less operating expenses: $- Select - - Select - - Select - $- Select - Question Content Area 4. Calculate the average cost of preparing a tax return for last year. When required, round your answer to the nearest dollar. $fill in the blank 1e4fa1ffafbe001_1 per return How do the differences between services and tangible products affect the ability of MDS to use the last year's average cost of preparing a tax return in budgeting the cost of tax return services to be offered next year