Birmingham Contractors uses a job order costing system.

| October 22, 2018

Birmingham Contractors uses a job order costing system. In May 2010, the company made a $3,300,000 bid to build a pedestrian overpass over the beach highway at Gulf Shores, Alabama. Birmingham Contractors won the bid and assigned #515 to the project. Its completion date was set at December 15, 2010. The following costs were estimated for completion of the overpass: $1,240,000 for direct material, $670,000 for direct labor, and $402,000 for overhead.During July, work began on job #515; direct material cost assigned to Job #515 was $121,800, and direct labor cost associated with it was $175,040. The firm uses a predetermined OH rate of 60 percent of direct labor cost. Birmingham Contractors also worked on several other jobs during July and incurred the following costs:Direct material (including Job #515) issued …………….$579,300Direct labor (including Job #515) accrued ……………… 584,000Indirect labor accrued …………………………………… 55,800Administrative salaries and wages accrued ……………… 39,600Depreciation on construction equipment ………………… 26,400Depreciation on office equipment ………………….……. 7,800Client entertainment (on accounts payable) …………….. 11,100Advertising for firm (paid in cash) ………………………. 6,600Indirect material (from supplies inventory) …………….. 18,600Miscellaneous expenses (design-related; to be paidin the following month) …………………………. 10,200Accrued utilities (for office, $1,800;for construction, $5,400)………………………… 7,200During July, Birmingham Contractors completed several jobs that had been in process before the beginning of the month. These completed jobs sold for $1,224,000 and payment will be made to the company in August. The related job cost sheets showed costs associated with those jobs of $829,000. At the beginning of July, Birmingham Contractors had Work in Process Inventory of $871,800.a. Prepare a job order cost sheet for Job #515, including all job details, and post the appropriate cost information for July.b. Prepare journal entries for the preceding information.c. Prepare a Cost of Goods Manufactured Schedule for July for Birmingham Contractors.d. Assuming that the company pays income tax at a 40 percent rate, prepare an income statement for Birmingham Contractors.

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