Problem
Keisha Tombert, the bookkeeper for Washington Consulting, a political consulting fi rm, 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. Keisha wondered if such a schedule could be prepared for her fi rm. She realized that, as a service-oriented company, it would have no work in process inventory to consider.
Listed below are the costs her fi rm incurred for the month ended August 31, 2017.
Supplies used on consulting contracts $ 1,700
Supplies used in the administrative offi ces 1,500
Depreciation on equipment used for contract work 900
Depreciation used on administrative offi ce equipment 1,050
Salaries of professionals working on contracts 15,600
Salaries of administrative offi ce personnel 7,700
Janitorial services for professional offi ces 700
Janitorial services for administrative offi ces 500
Insurance on contract operations 800
Insurance on administrative operations 900
Utilities for contract operations 1,400
Utilities for administrative offi ces 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 classifi ed and reported in the fi nancial statements.