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:

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:

During April, Cutwater completed the following production transactions:

Purchased job supplies costing $$4,500$ on account.

Purchased materials for specific jobs costing $$150,000$ on account.

Incurred direct labor costs of $$225,000$ and indirect labor costs of $$155,000.$

Used production supplies costing $$2,200.$

Recorded equipment depreciation of $$12,000.$

Incurred miscellaneous payables for production overhead of $$78,000.$

Applied production overhead at a predetermined rate of $$100$ per production hour, based on $2,500$

production hours.

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.