the consulting firm of reznick and fedder accumulates costs associated with individu 647615

The consulting firm of Reznick and Fedder accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during May:

May 7

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Charged 440 hours of professional (lawyer) time to the Daley Co. breech of

 

contract suit to prepare for the trial, at a rate of $175 per hour.

11.

Reimbursed travel costs to employees for depositions related to the Daley

 

case, $24,000.

22.

Charged 225 hours of professional time for the Daley trial at a rate of $250

 

per hour.

25.

Received invoice from consultants Rucker and Putnam for $47,000 for expert

 

testimony related to the Daley trial.

30.

Applied office overhead at a rate of $45 per professional hour charged to the

 

Daley case.

31

Paid secretarial and administrative salaries of $20,000 for the month.

31

Used office supplies for the month, $6,000.

31

Paid professional salaries of $55,000 for the month.

31

Billed Daley $260,000 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?

c. Determine the gross profit on the Daley case, assuming that over or underapplied office overhead is closed annually to cost of services.

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