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.
