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 65% of media purchases. On August 1, the four advertising projects had the following accumulated costs:   August 1 Balances Vault Bank $270,000 Take Off Airlines  80,000 Sleepy Tired Hotels 210,000 Tastee Beverages 115,000 Total $675,000   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 $190,000 $710,000 Take Off Airlines  85,000  625,000 Sleepy Tired Hotels 372,000  455,000 Tastee Beverages 421,000 340,000 Total $1,068,000 $2,130,000   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. Required:   Journalize the four summary entries on August 31 to record each of the following for the month. Refer to the Chart of Accounts for exact wording of account titles.

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Question 1:Assume a local hotel is a service entity. Give some examples of the hotel’s direct and indirect costs, specifying the cost object of each. How might the hotel’s management use this information? Question 2:Discuss what may be the issues in using process costing to estimate the cost of the services produced in mass service entities. Question 3:The following costs relate to Telecommunications Fiji Inc.1. The salaries of the technicians who install new phone and data lines.2. The salaries of the scientists and engineers who develop new services.3. The cost of cables used to connect new services.4. The salaries paid to sales staff.5. The salaries of staff who deal with customer complaints.6. The cost of fuel for vans used by technicians who install new services.7. The cost of advertising in the newspapers.8. The salaries of technicians who resolve service problems.9. The cost of fuels for vans used by technicians who resolve service problems.Required:Classify the costs listed…

2. a) A company manufactures and retails tablet computers. You are required to group the costs which are listed below and numbered (1)-(10) into the following classifications i-v (each cost is intended to belong to only one classification): 1- Wiring for the tablet 2-The maintenance contract from the machines 3- Aftersales customer service 4- The Chief Executive Salary 5- Shipping costs from the warehouse to the retailer 6- Marketing Costs 7- Interest on bank overdraft 8- Staff Training costs 9- Electricity to run the production line 10- Warehouse storage rent for the tablets. i. ii. iii. iv. V. Direct materials 1 Indirect production overhead 2 Selling and distribution costs Administration costs Finance costs

Wanda Instrumentation produces navigational equipment for ships, aircraft (both staffed and drones), and land vehicles. The parts are produced to specification by their customers. Depending on the customer and the type of job, the customer pays according to the terms of either a "fixed-price" contract (the price does not depend directly on the cost of the job) or of a "cost-plus" contract (the price is equal to recorded cost plus a fixed fee). Wanda expects only two clients (Ivanhoe Aviation and Rolf's Shipyard) in Year 2. The work done for Ivanhoe will all be done under cost-plus contracts while the work done for Rolf's will all be done under fixed-price contracts. Selected budget data for Year 2 include the following: Direct labor cost ($000) Direct materials cost ($000) Manufacturing overhead ($000) Ivanhoe Aviation $ 660 1,980 Required A Required B Required: a. Compute the predetermined rate assuming that Wanda Instrumentation uses direct labor costs to apply overhead. b. Compute…

Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period: \table[[,IT,HR,Publishing,Binding],[,0,1,550,2,480,2,170],[IT tickets,16,0,24,40],[\table[[Employees],[Department direct costs]],$154,000,$248,400,$432,000,$395,000

Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period:   IT HR Publishing Binding IT tickets 0 1,700 1,700 5,100 Employees 16 0 24 40 Department direct costs $ 156,000 $ 266,200 $ 430,000 $ 390,000 Required: Use the step method to allocate the service costs, using the following: The order of allocation starts with IT. The order of allocation starts with HR.

Gala Company is a manufacturer of laptop computers. Various costs and expenses associated with its operations are as follows. The company intends to classify these costs and expenses into the following categories: direct materials, direct labor, manufacturing overhead, and period costs. For each item, indicate the cost category to which it belongs. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Property taxes on the factory building. Production superintendents' salaries. Memory boards and chips used in assembling computers. Depreciation on the factory equipment. Salaries for quality control inspectors. Sales commissions paid to sell laptop computers. Electrical components used in assembling computers. Wages of workers assembling laptop computers. Soldering materials used on factory assembly lines. Salaries for the night security guards for the factory building. Category

Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operating departments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each IT request) in each department and HR costs on the basis of employees in each department. The following data appear in the company records for the current period:   IT HR Publishing Binding IT tickets 0 1,500 2,400 2,100 Employees 16 0 24 40 Department direct costs $ 150,000 $ 247,500 $ 430,000 $ 390,000   Required: Use the step method to allocate the service costs, using the following:The order of allocation starts with IT.Note: Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.   Costs Allocated To: Costs Allocated To: Costs Allocated To: Costs Allocated To: From: IT HR Pubishing Binding Service department costs         IT         HR         Total Costs $ $ $ $

Parts World (PW) designs and produces automotive parts. In 2017, actual manufacturing overhead is $316,000. PW's simple costing system allocates manufacturing overhead to its three customers based on machine-hours and prices its contracts based on full costs. One of its customers has regularly complained of being charged noncompetitive prices, so PW's controller Duncan Johnson realizes that it is time to examine the consumption of overhead resources more closely. He knows that there are three main departments that consume overhead resources: design, production, and engineering. Interviews with the department personnel and examination of time records yield the following detailed information: (Click the icon to view the information.) Read the requirements. Requirement 1. Compute the manufacturing overhead allocated to each customer in 2017 using the simple costing system that uses machine-hours as the allocation base. Determine the formula needed to calculate overhead using the simple…