The consulting firm of Tilton and Henderson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during June:
June 4. Charged 600 hours of professional (lawyer) time to the Rucker Co. breech of contract suit to prepare for the trial, at a rate of $200 per hour.
8. Reimbursed travel costs to employees for depositions related to the Rucker case, $21,000.
12. Charged 300 hours of professional time for the Rucker trial at a rate of $260 per hour. 16. Received invoice from consultants Wenzel and Lachgar for $64,000 for expert testimony related to the Rucker trial.
24. Applied office overhead at a rate of $55 per professional hour charged to the Rucker case.
30. Paid secretarial and administrative salaries of $35,000 for the month.
30. Used office supplies for the month, $12,000.
June 30. Paid professional salaries of $180,000 for the month.
30. Billed Rucker $380,000 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 Rucker case, assuming that over- or underapplied office overhead is closed monthly to cost of services.