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 $89,700 Take Off Airlines 26,900 Sleepy Tired Hotels 62,800 Tastee Beverages 38,600 Total $218,000 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 $64,600 $232,800 Take Off Airlines 28,800 204,800 Sleepy Tired Hotels 127,100 149,600 Tastee Beverages 144,600 111,800 Total $365,100 $699,000 At the end of August, both the Vault Bank and Take Off Airlines campaigns were completed The costs of completed campaigns are debited to the cost of services account a Journalize the summary entry to record the direct labor costs for the month a Work in Process fill in the blank 331e4b0eb07e059 2 Salaries Payable fill in the blank 331e4b0eb07e059 4 Feedback b Journalize the summary entry to record the media purchases for the month b Work in Process fill in the blank 289faef8a05ffde 2 Accounts Payable fill in the blank 289faef8a05ffde 4 Feedback c Journalize the summary entry to record the overhead applied for the month c Work in Process fill in the blank 94ba610ae07700e 2 Agency Overhead fill in the blank 94ba610ae07700e 4 Feedback d Journalize the summary entry to record the completion of Vault Bank and Take Off Airlines for the month d Cost of Services fill in the blank fdd17df6dfb8fd1 2 Work in Process fill in the blank fdd17df6dfb8fd1 4 Feedback Feedback

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 01, 2024

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

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	$89,700
Take Off Airlines	26,900
Sleepy Tired Hotels	62,800
Tastee Beverages	38,600
Total	$218,000

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	$64,600	$232,800
Take Off Airlines	28,800	204,800
Sleepy Tired Hotels	127,100	149,600
Tastee Beverages	144,600	111,800
Total	$365,100	$699,000

At the end of August, both the Vault Bank and Take Off Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account.

a. Journalize the summary entry to record the direct labor costs for the month.