The law firm of Colaw Associates uses a job order cost system. Cost data for the month of March follow.

1. Purchased supplies on account $1,800.

2. Issued supplies $1,200 (60% direct and 40% indirect).

3. Assigned labor costs based on time tickets for the month which indicated labor costs of $70,000 (80% direct and 20% indirect).

4. Operating overhead costs incurred for cash totaled $40,000.

5. Operating overhead is applied at a rate of 90% of direct labor cost.

6. Work completed totaled $75,000.

Instructions

Using the format shown in Illustration 12.25:

a. Record the transactions for March.

b. Determine the balance of the Service Contracts in Process account.

Determine cost of jobs and ending balance in work in process and overhead accounts.