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HEGY CHOCOLATES Job Order Costing Hegy Chocolates is located in Cleveland. The company prepares gift boxes of chocolates for private parties corporate promotions, and retail vendors. Each order contains a selection of chocolates determined by the customer. Accordingly, Hegy Chocolates uses a job order costing system and allocates manufacturing overhead based on direct labor cost. Components of product costs are as follows: Direct materials: chocolate, filling, wrappers, boxes Direct labor: employee time to fill and wrap the boxes Manufacturing overhead: a other costs to operate kitchen facilities and assembly area Annual budget: $2,680,500 Direct materials: $1,892,000 Direct labor: Manufacturing overhead $1,135,200 For December, Hegy had several open jobs in various stages of completion Bailey Law Firm (Job B12) On November 15th, Peter Bailey of Bailey Law Firm placed an order for 500 boxes of gourmet Belgian and Swiss chocolates. This order is for the firm's clients as Christmas presents and had a completion date set for December 10th. The order was fulfilled and shipped on December 6th. This order has a markup from cost of 500%