Question - ABC Company is a adesign firm. The company works with clients to prepare floor plan and finishing of office space. The company employs 10 professionals and 5 staff. The following data are provided for last year.
Number of designs completed and sold - 700
Beginning inventory of direct materials - $20,000
Beginning inventory of designs in process - $60,000
Ending inventory of direct materials - $
Ending inventory of designs in process - $100,000
Purchases, direct materials - $40,000
Direct labor - $800,000
Manufacturing overhead - $100,000
Administrative expenses - $150,000
Selling expenses - $60,000
Average fee for a design - $2,100
Required:
a. Compute cost of services sold.
b. Prepare an income statement for the company.