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 1.8 hours. On average, HHH completes about 18,000 cleanings per year. The following total costs are associated with the total cleanings:

Direct materials	?
Direct labor	$532,800
Variable overhead	21,600
Fixed overhead	25,200

Next year, HHH expects to purchase $53,600 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.

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 $58,100 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 woul v - Select your answer - by $ increase decrease