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 600 hours of professional lawyer) time to the Obsidian Co, breech of contract suit to prepare for the trial, at a rate of $210 per hour. 10. Reimbursed travel costs to employees for depositions related to the Obsidian case, $29,000. 14. Charged 270 hours of professional time for the Obsidian trial at a rate of $250 per hour. 18. Received invoice from consultants Wadsley and Harden for $60,100 for expert testimony related to the Obsidian trial, 27. Applied office overhead at a rate of $60 per professional hour charged to the Obsidian case. 31. Pald administrative and support salaries of $3100 for the month, 31. Used office supplies for the month, $12,500. 31. Paid professional salaries of $178,300 for the month 31. Billed Obsidian $382,000 for successful defense of the case. 2. 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 Salaries Payable July 10 Work In Process Cash II II III II II II July 14 Work in Process Salaries Payable July 18 Work in Process July 18 Work in Process Consultant Fees Payable July 22 Work in Process Office Overhead July 31 Admin. sal. Office Overhead Cash Accounting numeric tild July 31 Supplies office Overhead Supplies DI II III II II II III II II II July 31 Prof. sal Salaries Payable Cash July 31 Billed Accounts Receivable Fees Earned July 31 Cost Cont of Services Work in Process July 31 Cost GRACE Work in Process Chew Wort 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 We Work b. Compare the actual cost and the applied cost c. Adjust cost of Services for underapplied or overapplied overhead. Entries for Direct Labor and Factory Overhead Schumacher Industries Inc. manufactures recreational vehicles. Schumacher Industries uses a job order cost system. The time tickets from June jobs are summarized as follows: Job 11-101 $2,230 Job 11-102 1,510 Job 11-103 Job 11-104 1,190 1,830 1,190 Job 11-105 Factory supervision 1,030 Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $28 per direct labor hour. The direct labor rate is $15 per hour a. Journalize the entry to record the factory labor costs. If an amount box does not require an entry, leave it blank. Work in Process Factory Overhead Wages Payable o Increase the work in process for the direct labor and factory overhead for the indirect labor b. Journalize the entry to apply factory overhead to production for June. If an amount box does not require an entry, leave it bank Work in Process Factory Overhead
