The Ad Guys Inc. provides advertising services for clients across the nation. The Ad Guys is presently working on four projects, each for a different client. The Ad Guys 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 50% of media purchases. On June 1, the four advertising projects had the following accumulated costs:June 1 BalancesClinton Bank........ $80,000Pryor Airlines......... 24,000O?? Ryan Hotels....... 56,000Marshall Beverages..... 34,000During June, The Ad Guys incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts:

At the end of June, both the Clinton Bank and Pryor Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account.Determine each of the following for the month:a. Direct labor costs.b. Media purchases.c. Overhead applied.d. Completion of Clinton Bank and Pryor Airlinescampaigns.

Transcribed Image Text:

Direct Labor $ 56,000 Media Purchases Clinton Bank Pryor Airlines O'Ryan Hotels Marshall Beverages Total $ 210,000 185,000 135,000 25,000 110,000 125,000 $316,000 101,000 $ 631,000