Job Order Cost Accounting for a Service Company The law firm of Furlan and Benson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July: July 3. Charged 560 hours of professional (lawyer) time to the Obsidian Co. breech of contract suit to prepare for the trial, at a rate of $160 per hour. 10. Reimbursed travel costs to employees for depositions related to the Obsidian case, $15,600. 14. Charged 260 hours of professional time for the Obsidian trial at a rate of $280 per hour. 18. Received invoice from consultants Wadsley and Harden for $67,900 for expert testimony related to the Obsidian trial. 27. Applied office overhead at a rate of $50 per professional hour charged to the Obsidian case. 31. Paid administrative and support salaries of $29,100 for the month. 31. Used office supplies for the month, $9,800. 31. Paid professional salaries of $176,200 for the month. 31. Billed Obsidian $327,500 for successful defense of the case. a. Provide the journal entries for each of these transactions. If an amount box does not require an entry, leave it blank. July 3 Work in Process 89,600 Salaries Payable 89,600 July 10 Work in Process 15,600 Cash 15,600 July 14 Work in Process 72,800 Salaries Payable 72,800 July 18 Work in Process 67,900 Consultant Fees Payable 67,900 III July 27 Work in Process 41,000 Office Overhead 41,000 Office Overhead 41,000 July 31 Admin. sal. Office Overhead 29,100 Cash 29,100 July 31 Supplies Office Overhead Supplies July 31 Prof. sal. Salaries Payable 176,200 O ED O O DO II II UUEI Cash 176,200 July 31 Billed Accounts Receivable 327,500 Fees Earned July 31 Cost Cost of Services Work in Process Feedback Check My Work a. Record the direct costs in Work in Process. Apply the overhead based on professional hours. Record actual overhead in the Office Overhead account. For cases completed, move the costs from Work in Process to Cost of Services. b. How much office overhead is over- or underapplied? Enter your answer as a positive number. Overapplied c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services