LO.4 (Comprehensive) Birmingham Contractors uses a job order costing system. In

May 2010, the company made a $3,300,000 bid to build a pedestrian overpass over the

beach highway at Gulf Shores, Alabama. Birmingham Contractors won the bid and

assigned #515 to the project. Its completion date was set at December 15, 2010. Th e

following costs were estimated for completion of the overpass: $1,240,000 for direct

material, $670,000 for direct labor, and $402,000 for overhead.

During July, work began on job #515; direct material cost assigned to Job #515

was $121,800, and direct labor cost associated with it was $175,040. The rm uses a

predetermined OH rate of 60 percent of direct labor cost. Birmingham Contractors

also worked on several other jobs during July and incurred the following costs:

Direct material (including Job #515) issued $579,300

Direct labor (including Job #515) accrued 584,000

Indirect labor accrued 55,800

Administrative salaries and wages accrued 39,600

Depreciation on construction equipment 26,400

Depreciation on offi ce equipment 7,800

Client entertainment (on accounts payable) 11,100

Advertising for fi rm (paid in cash) 6,600

Indirect material (from supplies inventory) 18,600

Miscellaneous expenses (design-related; to be paid in the following month) 10,200

Accrued utilities (for offi ce, $1,800; for construction, $5,400) 7,200

During July, Birmingham Contractors completed several jobs that had been in process

before the beginning of the month. Th ese completed jobs sold for $1,224,000 and

payment will be made to the company in August. Th e related job cost sheets showed

costs associated with those jobs of $829,000. At the beginning of July, Birmingham

Contractors had Work in Process Inventory of $871,800.

a. Prepare a job order cost sheet for Job #515, including all job details, and post the

appropriate cost information for July.

b. Prepare journal entries for the preceding information.

c. Prepare a Cost of Goods Manufactured Schedule for July for Birmingham

Contractors.

d. Assuming that the company pays income tax at a 40 percent rate, prepare an income

statement for Birmingham Contractors.