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 45% of media purchases.

On August 1, the four advertising projects had the following accumulated costs:

	August 1 Balances
Vault Bank	$76,600
Take Off Airlines	23,000
Sleepy Tired Hotels	53,600
Tastee Beverages	32,900
Total	$186,100

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	$53,200		$200,500
Take Off Airlines	23,700		176,400
Sleepy Tired Hotels	104,500		128,800
Tastee Beverages	118,900		96,300
Total	$300,300		$602,000

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. If an amount box does not require an entry, leave it blank.

a.		fill in the blank 093a5b092018048_2	fill in the blank 093a5b092018048_3
		fill in the blank 093a5b092018048_5	fill in the blank 093a5b092018048_6

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.

b.		fill in the blank 39c80afd7f98fd2_2	fill in the blank 39c80afd7f98fd2_3
		fill in the blank 39c80afd7f98fd2_5	fill in the blank 39c80afd7f98fd2_6

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.

c.		fill in the blank 71797bf4902406a_2	fill in the blank 71797bf4902406a_3
		fill in the blank 71797bf4902406a_5	fill in the blank 71797bf4902406a_6

d. Journalize the summary entry to record the completion of Vault Bank and Take Off Airlines for the month. If an amount box does not require an entry, leave it blank.

d.		fill in the blank 7b7f8afec02704a_2	fill in the blank 7b7f8afec02704a_3
		fill in the blank 7b7f8afec02704a_5	fill in the blank 7b7f8afec02704a_6