1. Optimum Finance Incorporated provides budget, savings, and investment services to clients who want a stress-free financial lifestyle. The company customizes a program for each client based on their individual goals that includes budget recommendations, investment counseling, and savings techniques. The company uses a job order cost system that keeps track of the cost of the amount of time financial consultants spend with each client.

Optimum applies all indirect operating costs (e.g., rent, utilities, and management salaries) as a percentage of the consultant's labor cost. During the most recent year, the firm estimated that it would pay $500,000 to its consultants and incur indirect operating costs of $875,000. Actual consultant labor costs were $537,500 and actual indirect operating costs were $850,000. During the year, Optimum provided 40 hours of consulting services to Joan Clair for which Optimum pays an average of $22 per hour. What is the total cost of providing services to Joan?

Multiple Choice

• $2,420.
• $1,383.
• $2,272.
• $2,376.

2. Optimum Finance Incorporated provides budget, savings, and investment services to clients who want a stress-free financial lifestyle. The company customizes a program for each client based on their individual goals that includes budget recommendations, investment counseling, and savings techniques. The company uses a job order cost system that keeps track of the cost of the amount of time financial consultants spend with each client.

Optimum applies all indirect operating costs (e.g., rent, utilities, and management salaries) as a percentage of the consultant's labor cost. During the most recent year, the firm estimated that it would pay $250,000 to its consultants and incur indirect operating costs of $300,000. Actual consultant labor costs were $268,750 and actual indirect operating costs were $275,000. During the year, Optimum provided 36 hours of consulting services to Robert Howard for which Optimum pays an average of $18 per hour. What is the total cost of providing services to Robert?

Multiple Choice

• $1,361.
• $1,188.
• $1,426.
• $1,311.

3. Shellenback Incorporated has provided the following information for the year ended 20x8:

1. Purchased raw materials on account for $203,800.
2. Issued $188,800 in raw materials to production ($15,800 were not traceable to specific jobs).
3. Incurred $158,800 in direct labor costs (18,550 hours), $56,300 in supervision costs (paid in cash).
4. Incurred the following additional manufacturing overhead costs: factory lease $25,800 (paid in cash); depreciation on equipment $29,800; factory utilities $17,300 (paid in cash).
5. Incurred the following nonmanufacturing costs, both paid in cash: advertising $58,800; sales commissions $61,800.
6. Applied manufacturing overhead to jobs in process at a rate of $9 per direct labor hour.
7. Completed jobs costing a total of $460,800.
8. Sold jobs for $738,800 on account. The cost of the jobs was $444,800.
9. Closed the manufacturing overhead account balance.

Required:

Prepare the journal entries to record these transactions.

Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.

4. Josie Incorporated has provided the following information for the year ended 20x8:

1. Purchased raw materials on account for $121,300.
2. Issued $114,600 in raw materials to production ($21,400 were not traceable to specific jobs).
3. Incurred $100,660 in direct labor costs (14,380 hours) and $60,700 in supervision costs (paid in cash).
4. Incurred the following additional manufacturing overhead costs: factory lease $23,400 (paid in cash); depreciation on equipment $19,200; custodial supplies $6,000 (paid in cash).
5. Incurred the following nonmanufacturing costs, both paid in cash: advertising $74,100; sales commissions $87,700.
6. Applied manufacturing overhead to jobs in process at a rate of $11 per direct labor hour.
7. Completed jobs costing a total of $344,400.
8. Sold jobs for $425,200 on account. The cost of the jobs was $341,800.
9. Closed the Manufacturing Overhead account balance.

Required:

Prepare the journal entries to record these transactions.

Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.