Question: Refer to the chapter opener regarding John Hewitt and his company, Liberty Tax Service. All successful businesses track their costs, and it is especially important for start-up businesses to monitor and control costs.
Required: 1. Assume that Liberty Tax Service uses a job order costing system. For the basic cost category of direct materials, explain how a job cost sheet for Liberty Tax Service(LTS) would differ from a job cost sheet for a manufacturing company.
2. For the basic cost categories of direct labor and overhead, provide examples of the types of costs that would fall into each category for Liberty Tax Service.