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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 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 68% of media purchases. On August 1, the four advertising projects had the following accumulated costs: Take Off Airlines Sleepy Tired Hotels Tastee Beverages Total August 1 Balances $261,000 85,000 208,300 122,300 $676,600
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