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 dient. 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 45% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $76,500 Take Off Airlines Sleepy Tired Hotels 23,000 53,600 32,900 Tastee Beverages Total $186,000 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 $50,100 $198,100 Take Off Airlines 22,400 174,300 Sleepy Tired Hotels 98,500 127,300 Tastee Beverages 112,100 95,300 Total $283,100 $595,000 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, 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 2. Journalize the summary entry to record the direct labor costs for the month. If an amount box does not require an entry leave it blank. Work in Process Salaries Payable Feed TC My Wor a. Increase the work in process for the direct costs and the applied overhead. Applied overhead should be based on media purchases. Transfer the cost of completed jobs out of work-in-process and into the cost of services account. b. Journalize the summary entry to record the media purchases for the month. If an amount box does not require an entry leave it blank. Work in Process Accounts Payable b. 88 Check My Won D. Increase the work in process for the direct costs and the applied overhead. Applied overhead should be based on media purchases. Transfer the cost of completed Jobs out of work in process and into the cost of services account C. Journalize the summary entry to record the overhead applied for the month. If an amount box does not require an entry, leave it blank Work in Process Agency Overhead Feed My Work Increase the work in process for the direct conts and the spoled overhead. Applied overhead should be based on media purchases. Transfer the cost of completed jobs out of work-in-process and into the cost of services account d. Journalize the summary entry to record the completion of Vault Bank and Take On Airlines for the month of an amount box does not require an entry. Have it blank d. Cost of Services Work in Process FOR Oh My Wor d. Increase the work in process for the direct costs and the applied overhead. Applied overhead should be based on media purchases. Transfer the cost of completed jobs out of work in process and into the cost of services account