Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Need help with indirect overhead, department margin, and unassigned overhead costs. Rogell Academic Services (RAS) provides tutoring and test preparation services for children and young
Need help with indirect overhead, department margin, and unassigned overhead costs.
Rogell Academic Services (RAS) provides tutoring and test preparation services for children and young adults. Employees include a director and six facilitators. The director manages all marketing and administrative activities, sometimes with the help of one of the other employees. RAS offers four basic services and accounts for each one separately. The services are Group Tutoring (Group), Personalized Tutoring (Pers), Test Prep (Test), and Coding (Code). The facilitators record the time spent on each service in the RAS computer system. Time spent in training, planning, or when demand is temporarily low is recorded as Not Billed (NB). Selected operating data for October follow: - The six facilitators all make $18 per hour. A bonus of $5 per hour is paid for facilitating the coding service. - The director earns $4,500 per month. - Overhead that cannot be directly traced to a service, which amounted to $3,420 in October, is allocated among the four services plus the Not Billed "service" based on the number of direct labor-hours used. - Marketing costs (in addition to the director's salary) in October amounted to $870. - Other administrative costs (in addition to the director's salary) in October were $560. - Revenue transactions are cash; all other transactions are on account. Required: Management wants to know whether each service is contributing to the company's profit. Prepare an income statement for October that shows the revenue and cost for each service. Note: Do not round intermediate calculations. Loss amounts should be indicated with a minus signStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started