Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Project Description: Youth Athletic Services (YAS) provides adult supervision for organized youth athletics. It has a president, William Mayes, and five employees. He and one

Project Description:

Youth Athletic Services (YAS) provides adult supervision for organized youth athletics. It has a president, William Mayes, and five employees. He and one of the other five employees manage all marketing and administrative duties. The remaining four employees work directly on operations. YAS has four service departments: managing, officiating, training, and dispute resolution. A time card is marked and records are kept to monitor the time each employee spends working in each department. When business is slow, there is idle time, which is marked on the time card. (It is necessary to have some idle time because some direct labor-hours must be available to accommodate fluctuating peak demand periods throughout the day and the week.)

 

Some of the July operating data are as follows:

 

 Idle TimeManagingOfficiatingTrainingDispute Resolution
Sales revenue $8,850$9,800$4,400$2,100
Direct labor (in hours)25320110155120
Direct overhead traceable to departments:     
   Equipment $1,140$1,065$890$15
   Supplies $390$490$440$390
   Transportation $565$1,190$275$80

 

Other Data:

  • The four employees working in the operating departments all make $18 per hour.
  • The fifth employee, who helps manage marketing and administrative duties, earns $3,200 per month, and William earns $3,950 per month.
  • Indirect overhead amounted to $1,168 and is assigned to departments based on the number of direct labor-hours used. Because there are idle hours, some overhead will not be assigned to a department.
  • In addition to salaries paid, other administrative costs were $320.
  • All revenue transactions are cash; all others are on account.
  • No inventories are kept.
  • In addition to salaries paid, marketing costs for items, such as advertising and special promotions totaled $790.

 

 

 

Management wants to know whether each department is contributing to the company's profit. Refer to your textbook (Chapter 7 pp. 286, 296-298) and article "Job Costing: Definition, Features, Procedure and Example" and answer the questions below:

 

  1. Explain in simple words what Job Costing is.

 

  1. Formulate an income statement for July that shows the revenue and cost of services for each department.

 

YOUTH ATHLETIC SERVICES
INCOME STATEMENT
For Month Ending July 31
 ManagingOfficiatingTrainingDispute ResolutionTotal
Revenue     
Cost of Services:     
   Labor     
   Direct Overhead     
   Indirect Overhead     
       Total costs of services     
Department margin     
Less other costs:     
   Unassigned labor costs     
   Unassigned overhead indirect costs     
   Marketing and administrative costs     
Operating profit (loss)     

 

Submit your work with calculations to Project 2 in Moodle.

 

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Advanced Accounting

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

5th edition

978-0077924379, 77924371, 978-0078025396, 78025397, 978-0077425654, 77425650, 978-0077667061

More Books

Students also viewed these Accounting questions

Question

What is present value? (LO 3)

Answered: 1 week ago

Question

What is the cost of capital? (LO 3)

Answered: 1 week ago

Question

What does the compounding effect mean? (LO 3)

Answered: 1 week ago