Job Order Cost Accounting Entries for a Service Business
The law firm of Tilton and Henderson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during June:
| June 4. | Charged 540 hours of professional (lawyer) time to the Rucker Co. breech of contract suit to prepare for the trial, at a rate of $240 per hour. |
| 8. | Reimbursed travel costs to employees for depositions related to the Rucker case, $23,700. |
| 12. | Charged 140 hours of professional time for the Rucker trial at a rate of $280 per hour. |
| 16. | Received invoice from consultants Wenzel and Lachgar for $73,300 for expert testimony related to the Rucker trial. |
| 24. | Applied office overhead at a rate of $55 per professional hour charged to the Rucker case. |
| 30. | Paid secretarial and administrative salaries of $26,600 for the month. |
| 30. | Used office supplies for the month, $9,000. |
| 30. | Paid professional salaries of $167,200 for the month. |
| 30. | Billed Rucker $346,600 for successful defense of the case. |
a. Provide the journal entries for each of the above transactions.
|
b. How much office overhead is over- or underapplied? Enter your answer as a positive number.
$ SelectOverappliedUnderappliedCorrect 2 of Item 2
c. Determine the gross profit on the Rucker case, assuming that over- or underapplied office overhead is closed monthly to cost of services.
$
