Kim's Asphalt does driveway and parking lot resurfacing work for large commercial clients as well as small residential clients. An Inventory of materials and equipment is on hand at all times so that work can start as quickly as possible. Special equipment is ordered as required. On May 1, the Materials and Equipment Inventory account had a balance of $43,000. The Work-In-Process Inventory account is maintained to record costs of work not yet complete. There were two such jobs on May 1 with the following costs. Materials and equipment Job 27 Highlands Mall $16,425 Job 33 Pine Ridge Estates Direct labor Overhead (applied) 14,200 5,680 $ 53,200 26,600 10,640 Overhead has been applied at 40 percent of the costs of direct labor. During May, Kim's Asphalt started two new jobs. Additional work was carried out on Jobs 27 and 33, with the latter completed and billed to Pine Ridge Estates. Details on the costs incurred on jobs during May follow. Job 27 33 Materials and equipment Direct labor (wages payable) 34 $3,700 $5,500 $5,300 $3,600 5,200 7,450 6,600 2,300 35 Other May Events 1. Received $13,200 payment on Job 24 delivered to customer in April. 2. Purchased materials and equipment for $10,100 on account. 3. Billed Pine Ridge Estates $137,000 and received payment for $110,000 of that amount. 4. Determined that payroll for Indirect labor personnel totaled $720. 5. Issued supplies and Incidental materials for current jobs costing $225. 6. Recorded overhead and advertising costs for the operation as follows (all cash except equipment depreciation). Property taxes Storage area rental $620 745 Truck and delivery cost 390 Advertising and promotion campaign 670 Inspections 270 Telephone and other miscellaneous 395 Equipment depreciation 520