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ncome Statement

Jean and Tom Perritz own and manage Happy Home Helpers, Inc. $($HHH$),$ a house$-$cleaning service. Each cleaning $($cleaning one house one time$)$ takes a team of three house cleaners about $1\mathrm{.}5$ hours. On average, HHH completes about $15,000$ cleanings per year. The following total costs are associated with the total cleanings:

Direct materials $?$

Direct labor $$472,500$

Variable overhead $15,000$

Fixed overhead $18,000$

Next year, HHH expects to purchase $$25,600$ of direct materials. Projected beginning and ending inventories for direct materials are as follows:

Direct Materials Inventory

Beginning $$4,000$

Ending $2,600$

There is no work$-$in$-$process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. HHH expects to sell $15,000$ cleanings at a price of $$45$ each next year. Total selling expense is projected at $$22,000,$ and total administrative expense is projected at $$53,000.$

Required:

Question Content Area

$1.$ Prepare an income statement in good form.

Happy Home Helpers, Inc.

Income Statement

For the Coming Year

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

Less operating expenses:

$$-$ Select $-$

$-$ Select $--$ Select $-$

$$-$ Select $-$

Question Content Area

$2.$ What if Jean and Tom increased the price to $$50$ per cleaning and no other information was affected? Which of the following statements would be true?

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