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Cost Accumulation: Service

Youth Athletic Services (YAS) provides adult supervision for organized youth athletics. It has a president, William Mayes, and five employees. He and one of the other five employ- ees manage all marketing and administrative duties. The remaining four employees work directly on operations. YAS has four service departments: managing, officiating, training, and dispute resolution. A time card is marked, and records are kept to monitor the time each employee spends working in each department. When business is slow, there is idle time, which is marked on the time card. (It is necessary to have some idle time because some direct labor-hours must be available to accommodate fluctuating peak demand periods throughout the day and the week.)

Idle Time managing officiating training dispute resolution

Sales revenue . . . . . . . . . . . . . $6,950 $7,900 $3000 $1000

Direct labor (in hours) . . . . . . . 25 320 80 125 90

Direct overhead traceable to departments

Equipment . . . . . . . . . . . . . . $950 $875 $700 $10

Supplies. . . . . . . . . . . . . . . . 200 300 250 200

Transportation . . . . . . . . . . . 375 1000 150 50

Other data

• The four employees working in the operating departments all make $15 per hour.
• The fifth employee, who helps manage marketing and administrative duties, earns $2,250
• per month, and William earns $3,000 per month.
• Indirect overhead amounted to $768 and is assigned to departments based on the number
• of direct labor-hours used. Because there are idle hours, some overhead will not be as-
• signed to a department.
• In addition to salaries paid, marketing costs for items such as advertising and special
• promotions totaled $600.
• In addition to salaries paid, other administrative costs were $225.
• All revenue transactions are cash; all others are on account.
• Required
• Management wants to know whether each department is contributing to the company's profit.
• income statement for July that shows the revenue and cost of services for each department.
• short report to management about departmental profitability. No inven- tories are kept.

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