Westley Company provides engineering services. It began jobs 1 through 3 in the first week of June. The following transactions occurred during that time.

1. Purchased supplies on account totaling $1,500

2. Used supplies totaling $800 for various jobs

3. Processed timesheets showing the following:

4. Applied overhead using a predetermined rate of $10 per direct labor hour.

5. Completed job 1 and billed the customer $3,000.

Required:

a. Calculate the costs incurred in June for each of the three jobs.

b. Make the appropriate journal entry for each item described previously. Assume all payments will be made next month.

c. How much gross profit did Westley Company earn from job 1?

Transcribed Image Text:

Job 1, direct labor (50 hours) 1,500 1,700 400 Job 2, direct labor (60 hours) Job 3, direct labor (10 Indirect labor Total 900 $ 4,500