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:
jul. 3 charged 175 hours of professional (lawyer) time to the obsidian co. breech of contract suit to prepare for the trial, at a rate of $150 per hour.
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.
required:
a. provide the journal entries for each of these transactions. refer to the chart of accounts for exact wording of account titles.
b. how much office overhead is over- or underapplied? c. determine the gross profit on the obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.