Job Order Costing for a Service Company The law firm of Prawitt and Bradford accumulates costs associated with individual cases, using job order costing. The following transactions occurred during August: August 3. Charged 550 hours of professional (lawyer) time to the Shadow Creek Co. breech of contract suit to prepare for the trial, at a rate of $230 per hour. 10. Reimbursed travel costs to employees for depositions related to the Shadow Creek case, $23,900. 14. Charged 120 hours of professional time for the Shadow Creek trial at a rate of $290 per hour. 18. Received invoice from consultants Westerly and Henninger for $61,900 for expert testimony related to the Shadow Creek trial. 27. Applied office overhead at a rate of $40 per professional hour charged to the Shadow Creek case. 31. Paid administrative and support salaries of $19,000 for the month. 31. Used office supplies for the month, $6,400. 31. Paid professional salaries of $191,500 for the month. 31. Billed Shadow Creek $313,400 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. August 3 Work in Process Salaries Payable August 10 Work in Process Cash 126,500 126,500 23,900 23,900 August 14 Work in Process 34,800 Salaries Payable 34,800 August 18 Work in Process 61,900 Consultant Fees Payable 61,900 August 27 August 31 Admin. sal. Office Overhead Cash 19,000 19,000 August 31 Supplies Office Overhead 6,400 Supplies 6,400 August 31 Prof. sal. Salaries Payable 191,500 Cash 191,500 August 31 Billed Accounts Receivable 313,400 Fees Earned 313,400 August 31 Cost Cost of Services 313,400 X Work in Process 313,400 X 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. 25,400 X Overapplied c. Determine the gross profit on the Shadow Creek case, assuming that over- or underapplied office overhead is closed monthly to cost of services. Feedback