For August, Royal Consulting and Mediation Practice (RCMP) worked 700 hours for Alberta Company and 1,800 hours for Ontario Corporation. RCMP bills clients at the rate of $570 per hour; labor cost for its consulting staff is $370 per hour. The total number of hours worked in August was 2,500, and overhead costs were $57,000. Overhead is applied to clients at $27 per labor-hour. In addition, RCMP had $325,000 in marketing and administrative costs. All transactions are on account. All services were billed.

Transaction	Description
(a)	Record Labor cost
(b)	Record Applied Service Overhead
(c)	Record Cost of services billed
(d)	Record Actual Service Overhead

Required:

a. Show labor and overhead cost flows through T-accounts.

b. Prepare an income statement for the company for August.

Wages Payable					Work-In-Process
Beg. bal.					Beg. bal.
End. bal.	0
					End. bal.
Cost of Services Billed					Service Overhead Control
Beg. bal.					Beg. bal.
(c)
End. bal.	0				End. bal.
Applied Service O.H.
Beg. bal.
End. bal.

ROYAL CONSULTING AND MEDIATION PRACTICE
Income Statement
For the Month Ended August 31