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25 May, 23:56

Prepare an income statement for the company for August For August, Royal Consulting and Mediation Practice (RCMP) worked 900 hours for Alberta Company and 2,100 hours for Ontario Corporation. RCMP bills clients at the rate of $400 per hour; labor cost for its consulting staff is $200 per hour. The total number of hours worked in August was 3,000, and overhead costs were $60,000. Overhead is applied to clients at $24 per labor-hour. In addition, RCMP had $240,000 in marketing and administrative costs. All transactions are on account. All services were billed

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  1. 26 May, 02:03
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    Prepare an income statement for the company for August

    Revenue (3000*$400) 1,200,000

    Less Cost of Sales

    Labour Cost for Consulting Staff (3000*$200) 600,000

    Overheads 72,000

    Less Over Applied Overheads 12,000 660,000

    Gross Profit 540,000

    Less Operating Expenses

    Markerting and Administrative Costs 240,000

    Net Income 300,000

    Explanation:

    Net Income = Sales - Cost of Sale - Operating Expenses

    Cost of Sales in the case of RCMP involves the cost of providing a service for each of their clients.
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