Question

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 640 hours of professional (lawyer) time at a rate of $180 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, $27,000
14.	Charged 250 hours of professional time for the Obsidian trial at a rate of $250 per hour
18.	Received invoice from consultants Wadsley and Harden for $76,400 for expert testimony related to the Obsidian trial
27.	Applied office overhead at a rate of $65 per professional hour charged to the Obsidian case
31.	Paid administrative and support salaries of $41,100 for the month
31.	Used office supplies for the month, $13,900
31.	Paid professional salaries of $160,300 for the month
31.	Billed Obsidian $386,500 for successful defense of the case

a. Provide the journal entries for each of these transactions.

July 3
July 10
July 14
July 18
July 27
July 31 Admin. sal.
July 31 Supplies
July 31 Prof. sal.
July 31 Billed
July 31 Cost

b. How much office overhead is over- or underapplied? Enter your answer as a positive number.
$  

c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.
$

Answer 1