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 3. Charged 175 hours of professional (lawyer) time at a rate of $150 per hour to the Obsidian Co. breech of contract suit to prepare for the trial 10. Reimbursed travel costs to employees for depositions related to the Obsidian case, $12, 500. 14. Charged 260 hours of professional time for the Obsidian trial at a rate of $185 per hour 18. Received invoice from consultants Wadsley and Harden for $30,000 for expert testimony related to the Obsidian trial 27. Applied office overhead at a rate of $62 per professional hour charged to the Obsidian case 31. Paid administrative and support salaries of $28, 500 for the month 31. Used office supplies for the month, $4,000 31. Paid professional salaries of $74,350 for the month 31. Billed Obsidian $172,500 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 July -10 July 14 Julv 18 Work in Process Sahnes Pavable. Work in Process çish Work in Procerss Salanes Payable. Work in Procass July 27 Work in Process Office Overhead July 31 Admin. sal. Glice Onethead Cash Juky 31 Supplies Office: Overhead supplies. July 31 Prof. sal. Salaries Pavable. Gash July 31 Billed Accounts Receivable Ees Earmed July 31 Cost Cost of Services Workin process b. How much office overhead is over - or underapplied? Enter your answer as a positive number. s C. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services. 5
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 3. Charged 175 hours of professional (lawyer) time at a rate of $150 per hour to the Obsidian Co. breech of contract suit to prepare for the trial 10. Reimbursed travel costs to employees for depositions related to the Obsidian case, $12, 500. 14. Charged 260 hours of professional time for the Obsidian trial at a rate of $185 per hour 18. Received invoice from consultants Wadsley and Harden for $30,000 for expert testimony related to the Obsidian trial 27. Applied office overhead at a rate of $62 per professional hour charged to the Obsidian case 31. Paid administrative and support salaries of $28, 500 for the month 31. Used office supplies for the month, $4,000 31. Paid professional salaries of $74,350 for the month 31. Billed Obsidian $172,500 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 July -10 July 14 Julv 18 Work in Process Sahnes Pavable. Work in Process çish Work in Procerss Salanes Payable. Work in Procass July 27 Work in Process Office Overhead July 31 Admin. sal. Glice Onethead Cash Juky 31 Supplies Office: Overhead supplies. July 31 Prof. sal. Salaries Pavable. Gash July 31 Billed Accounts Receivable Ees Earmed July 31 Cost Cost of Services Workin process b. How much office overhead is over - or underapplied? Enter your answer as a positive number. s C. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services. 5
Chapter1: Financial Statements And Business Decisions
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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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Transcribed Image Text: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 3. Charged 175 hours of professional (lawyer) time at a rate of $150 per hour to the Obsidian Co.
breech of contract suit to prepare for the trial 10. Reimbursed travel costs to employees for depositions
related to the Obsidian case, $12,500. 14. Charged 260 hours of professional time for the Obsidian trial at
a rate of $185 per hour 18. Received invoice from consultants Wadsley and Harden for $30,000 for expert
testimony related to the Obsidian trial 27. Applied office overhead at a rate of $62 per professional hour
charged to the Obsidian case 31. Paid administrative and support salaries of $28, 500 for the month 31.
Used olfice supplies for the month, $4,000 31. Paid professional salaries of $74,350 for the month 31.
Billed Obsidian $172, 500 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 July -10 July 14 Julv 18 Work
in Process Sahnes Pavable. Work in Process çish Work in Procerss Salanes Payable. Work in Procass July 27
Work in Process Office Overhead July 31 Admin. sal. Glice Onethead Cash Juky 31 Supplies
Office:Overhead supplies. July 31 Prof. sal. Salaries Pavable. Gash July 31 Billed Accounts Receivable Ees
Earmed July 31 Cost Cost of Services Workin process b. How much office overhead is over - or
underapplied? Enter your answer as a positive number. s C. Determine the gross profit on the Obsidian
case, assuming that over- or underapplied office overhead is closed monthly to cost of services. 5
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