Concept explainers
The following are the
Law Firm Accounts | Manufacturing Firm Accounts |
Supplies | Raw Materials |
Salaries and Wages Payable | Factory Wages Payable |
Operating |
Manufacturing Overhead Work in Process |
Cost of Completed Service Contracts | Cost of Goods Sold |
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 cards 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
(a) Journalize the transactions for March. (Omit explanations.)
(b) Determine the balance of the Service Contracts in Process account. (Use a T-account.)
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