(L. OBJ. 3) Preparing an income statement and computing the unit cost for a service comp...

(L. OBJ. 3) Preparing an income statement and computing the unit cost for a service company [5—10 min]

Georgie’s Grooming is a competitor of Buddy Grooming. Georgie Oliver, owner, incurred the following operating costs to groom 2,700 dogs for the first quarter of 2011 (January, February, and March):

Georgie’s Grooming earned $46,300 in revenues for the first quarter of 2011.

Requirements

1. Prepare an income statement for the first quarter of 2011. Compute the ratio of operating expense to total revenue and operating income to total revenue.

2. Compute Georgie’s unit cost to groom one dog.