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 570 hours of professional (lawyer) time to the Obsidian Co. breech of contract suit to prepare for the trial, at a rate of $170 per hour. 10. Reimbursed travel costs to employees for depositions related to the Obsidian case, $17,100. 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 $74,000 for expert testimony related to the Obsidian trial. 27. Applied office overhead at a rate of $70 per professional hour charged to the Obsidian case. 31. Paid administrative and support salaries of $41,700 for the month. 31. Used office supplies for the month, $14,100. 31. Paid professional salaries of $176,400 for the month. 31. Billed Obsidian $358,000 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. July 3 Work in Process fill in the blank 8903d701a017005_2 fill in the blank 8903d701a017005_3 Salaries Payable fill in the blank 8903d701a017005_5 fill in the blank 8903d701a017005_6 July 10 Work in Process fill in the blank 8903d701a017005_8 fill in the blank 8903d701a017005_9 Cash fill in the blank 8903d701a017005_11 fill in the blank 8903d701a017005_12 July 14 Work in Process fill in the blank 8903d701a017005_14 fill in the blank 8903d701a017005_15 Salaries Payable fill in the blank 8903d701a017005_17 fill in the blank 8903d701a017005_18 July 18 Work in Process fill in the blank 8903d701a017005_20 fill in the blank 8903d701a017005_21 Consultant Fees Payable fill in the blank 8903d701a017005_23 fill in the blank 8903d701a017005_24 July 27 Office Overhead fill in the blank 8903d701a017005_26 fill in the blank 8903d701a017005_27 Cash fill in the blank 8903d701a017005_29 fill in the blank 8903d701a017005_30 July 31 Admin. sal. fill in the blank 8903d701a017005_32 fill in the blank 8903d701a017005_33 fill in the blank 8903d701a017005_35 fill in the blank 8903d701a017005_36 July 31 Supplies fill in the blank 8903d701a017005_38 fill in the blank 8903d701a017005_39 fill in the blank 8903d701a017005_41 fill in the blank 8903d701a017005_42 July 31 Prof. sal. fill in the blank 8903d701a017005_44 fill in the blank 8903d701a017005_45 fill in the blank 8903d701a017005_47 fill in the blank 8903d701a017005_48 July 31 Billed fill in the blank 8903d701a017005_50 fill in the blank 8903d701a017005_51 fill in the blank 8903d701a017005_53 fill in the blank 8903d701a017005_54 July 31 Cost fill in the blank 8903d701a017005_56 fill in the blank 8903d701a017005_57 fill in the blank 8903d701a017005_59 fill in the blank 8903d701a017005_60 b. How much office overhead is over- or underapplied? Enter your answer as a positive number. $fill in the blank d7ef3a04cfa8f95_1 c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services. $fill in the blank d7ef3a04cfa8f95_3
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 570 hours of professional (lawyer) time to the Obsidian Co. breech of contract suit to prepare for the trial, at a rate of $170 per hour. 10. Reimbursed travel costs to employees for depositions related to the Obsidian case, $17,100. 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 $74,000 for expert testimony related to the Obsidian trial. 27. Applied office overhead at a rate of $70 per professional hour charged to the Obsidian case. 31. Paid administrative and support salaries of $41,700 for the month. 31. Used office supplies for the month, $14,100. 31. Paid professional salaries of $176,400 for the month. 31. Billed Obsidian $358,000 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. July 3 Work in Process fill in the blank 8903d701a017005_2 fill in the blank 8903d701a017005_3 Salaries Payable fill in the blank 8903d701a017005_5 fill in the blank 8903d701a017005_6 July 10 Work in Process fill in the blank 8903d701a017005_8 fill in the blank 8903d701a017005_9 Cash fill in the blank 8903d701a017005_11 fill in the blank 8903d701a017005_12 July 14 Work in Process fill in the blank 8903d701a017005_14 fill in the blank 8903d701a017005_15 Salaries Payable fill in the blank 8903d701a017005_17 fill in the blank 8903d701a017005_18 July 18 Work in Process fill in the blank 8903d701a017005_20 fill in the blank 8903d701a017005_21 Consultant Fees Payable fill in the blank 8903d701a017005_23 fill in the blank 8903d701a017005_24 July 27 Office Overhead fill in the blank 8903d701a017005_26 fill in the blank 8903d701a017005_27 Cash fill in the blank 8903d701a017005_29 fill in the blank 8903d701a017005_30 July 31 Admin. sal. fill in the blank 8903d701a017005_32 fill in the blank 8903d701a017005_33 fill in the blank 8903d701a017005_35 fill in the blank 8903d701a017005_36 July 31 Supplies fill in the blank 8903d701a017005_38 fill in the blank 8903d701a017005_39 fill in the blank 8903d701a017005_41 fill in the blank 8903d701a017005_42 July 31 Prof. sal. fill in the blank 8903d701a017005_44 fill in the blank 8903d701a017005_45 fill in the blank 8903d701a017005_47 fill in the blank 8903d701a017005_48 July 31 Billed fill in the blank 8903d701a017005_50 fill in the blank 8903d701a017005_51 fill in the blank 8903d701a017005_53 fill in the blank 8903d701a017005_54 July 31 Cost fill in the blank 8903d701a017005_56 fill in the blank 8903d701a017005_57 fill in the blank 8903d701a017005_59 fill in the blank 8903d701a017005_60 b. How much office overhead is over- or underapplied? Enter your answer as a positive number. $fill in the blank d7ef3a04cfa8f95_1 c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services. $fill in the blank d7ef3a04cfa8f95_3
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
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 570 hours of professional (lawyer) time to the Obsidian Co. breech of contract suit to prepare for the trial, at a rate of $170 per hour. |
| 10. | Reimbursed travel costs to employees for depositions related to the Obsidian case, $17,100. |
| 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 $74,000 for expert testimony related to the Obsidian trial. |
| 27. | Applied office |
| 31. | Paid administrative and support salaries of $41,700 for the month. |
| 31. | Used office supplies for the month, $14,100. |
| 31. | Paid professional salaries of $176,400 for the month. |
| 31. | Billed Obsidian $358,000 for successful defense of the case. |
a. Provide the
| July 3 | Work in Process | fill in the blank 8903d701a017005_2 | fill in the blank 8903d701a017005_3 |
| Salaries Payable | fill in the blank 8903d701a017005_5 | fill in the blank 8903d701a017005_6 | |
| July 10 | Work in Process | fill in the blank 8903d701a017005_8 | fill in the blank 8903d701a017005_9 |
| Cash | fill in the blank 8903d701a017005_11 | fill in the blank 8903d701a017005_12 | |
| July 14 | Work in Process | fill in the blank 8903d701a017005_14 | fill in the blank 8903d701a017005_15 |
| Salaries Payable | fill in the blank 8903d701a017005_17 | fill in the blank 8903d701a017005_18 | |
| July 18 | Work in Process | fill in the blank 8903d701a017005_20 | fill in the blank 8903d701a017005_21 |
| Consultant Fees Payable | fill in the blank 8903d701a017005_23 | fill in the blank 8903d701a017005_24 | |
| July 27 | Office Overhead | fill in the blank 8903d701a017005_26 | fill in the blank 8903d701a017005_27 |
| Cash | fill in the blank 8903d701a017005_29 | fill in the blank 8903d701a017005_30 | |
| July 31 Admin. sal. | fill in the blank 8903d701a017005_32 | fill in the blank 8903d701a017005_33 | |
| fill in the blank 8903d701a017005_35 | fill in the blank 8903d701a017005_36 | ||
| July 31 Supplies | fill in the blank 8903d701a017005_38 | fill in the blank 8903d701a017005_39 | |
| fill in the blank 8903d701a017005_41 | fill in the blank 8903d701a017005_42 | ||
| July 31 Prof. sal. | fill in the blank 8903d701a017005_44 | fill in the blank 8903d701a017005_45 | |
| fill in the blank 8903d701a017005_47 | fill in the blank 8903d701a017005_48 | ||
| July 31 Billed | fill in the blank 8903d701a017005_50 | fill in the blank 8903d701a017005_51 | |
| fill in the blank 8903d701a017005_53 | fill in the blank 8903d701a017005_54 | ||
| July 31 Cost | fill in the blank 8903d701a017005_56 | fill in the blank 8903d701a017005_57 | |
| fill in the blank 8903d701a017005_59 | fill in the blank 8903d701a017005_60 |
b. How much office overhead is over- or underapplied? Enter your answer as a positive number.
$fill in the blank d7ef3a04cfa8f95_1
c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.
$fill in the blank d7ef3a04cfa8f95_3
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