27. Service Cost Flows Cutwater, an advertising agency with offices in San Francisco and New York, develops marketing campaigns for companies in the United States and overseas. To achieve cost control, assume Cutwater uses a job cost system similar to that found in a manufacturing organization. It uses some different account titles: Account Replaces Jobs-in-Process Job Supplies Inventory Cost of Jobs Completed Accumulated Depreciation, Agency Assets Production Overhead Work-in-Process Manufacturing Supplies Inventory Cost of Goods Sold Accumulated Depreciation, Factory Assets Manufacturing Overhead Cutwater does not maintain Raw Materials or Finished Goods Inventory accounts. Materials, such as props needed for video shoots, are purchased as needed from outside sources and charged directly to Jobs-in-Process and the appropriate job. The April 1 balances were as follows: Job Supplies Inventory. Jobs-in-Process Production Overhead. $ 10,000 200,000 2,850 underapplied During April, Cutwater completed the following production transactions: 1. Purchased job supplies costing $4,500 on account. 2. Purchased materials for specific jobs costing $150,000 on account. 3. Incurred direct labor costs of $225,000 and indirect labor costs of $155,000. 4. Used production supplies costing $2,200. 5. Recorded equipment depreciation of $12,000. 6. Incurred miscellaneous payables for production overhead of $78,000. 7. Applied production overhead at a predetermined rate of $100 per production hour, based on 2,500 production hours. 8. Completed jobs costing $622,000. Required a. Prepare "T" accounts showing the flow of costs through all service accounts and Cost of Jobs Completed. b. Calculate the cost incurred as of the end of April for the incomplete jobs still in process