Reference no: EM131774259
Problem - Young coopers, and touché (YCT) is a tax services firm. The firm is located in San Diego and employs 10 professionals and eight staff. The firm does tax work for businesses and well to do individual. The following data are provided for the last fiscal year. (YCT's first year runs from July 1 through June 30.)
Returns processed 2,000
Returns in process, beginning of the year $78,000
Returns in process, end of the year 134,000
Cost of services sold 890,000
Beginning direct materials inventory 20,000
Purchases, direct materials 40,000
Direct labor 800,000
Overhead 100,000
Administrative 69,000
Selling 53,000
1. Prepare a statement of cost of services sold?
2. Refer to the statement prepared in requirement 1. What is the dominant cost? Will this always be true of service organizations? If not, provide an example of an exception.
3. Assuming that the average fee for processing a tax return is $650, prepare an income statement for YCT?