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Problem 1: Asher, Inc. uses job order costing for his lawn care business. In April, Asher is fertilizing lawns for the upcoming summer season. Each spring, the lawn service provides two applications of fertilizer. The first requires .5 hours of direct labor and $15 of direct material. The second requires .25 direct labor hour and $10 of direct material. The wage rate averages $10 per hour. Asher applies overhead at 125% of direct labor cost. If Asher completes 10 jobs in April (both applications) and does the first application on an additional 10 jobs, what is the balance in his Service Contracts in Process account at the end of April?
Option 1: $725.00Option 2: $262.40Option 3: $525.00Option 4: $920.00
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