Job Order Cost Accounting for a Service Company The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 55% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $87,600 Take Off Airlines 26,300 Sleepy Tired Hotels 61,300 Tastee Beverages Total 37,700 $212,900 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases Vault Bank $58,000 $235,100 Take Off Airlines 25,900 206,900 Sleepy Tired Hotels 114,000 151,100 Tastee Beverages 129,700 112,900 Total $327,600 $706,000