Ben James established Big Sandy Combine (BSC) to provide executive counseling and job placement services to its clients. Ben charges a fee of $450.00 per hour for each service. The revenues and costs for the year are shown in the following income statement:Ben has kept good records of the following data for cost allocation purposes:
Required:
a. Complete the income statement using activity-based costing and BSCs three cost drivers.
b. Recompute the income statement using direct labor-hours as the only allocation base.