Joyce Tombert, the bookkeeper for Marks Consulting, a political consulting firm, has recently completed a managerial accounting course at her local college. One of the topics covered in the course was the cost of goods manufactured schedule. Joyce wondered if such a schedule could be prepared for her firm. She realized that, as a service-oriented company, it would have no work in process inventory to consider.
Listed below are the costs her firm incurred for the month ended August 31, 2014.
|
Supplies used on consulting contracts |
$ 1,200 |
|
Supplies used in the administrative offices |
1,500 |
|
Depreciation on equipment used for contract work |
900 |
|
Depreciation used on administrative office equipment |
1,050 |
|
Salaries of professionals working on contracts |
15,600 |
|
Salaries of administrative office personnel |
7,700 |
|
Janitorial services for professional offices |
400 |
|
Janitorial services for administrative offices |
500 |
|
Insurance on contract operations |
800 |
|
Insurance on administrative operations |
900 |
|
Utilities for contract operations |
1,400 |
|
Utilities for administrative offices |
1,300 |
Instructions
(a)Prepare a schedule of cost of contract services performed (similar to a cost of goods manufactured schedule) for the month.
(b)For those costs not included in (a), explain how they would be classified and reported in the financial statements.