Job Order Cost Accounting for a Service CompanyThe 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 Companyaccumulates costs for each account (client) on the başis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel andmedia 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 mediapurchases.On August 1, the four advertising projects had the following accumulated costs:August 1 BalancesVault Bank$68,700Take Off Airlines20,600Sleepy Tired Hotels48,100Tastee Beverages29,500Total$166,900During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts:Direct LaborMedia PurchasesVault Bank$46,100$173,800Take Off Airlines20,600152,900Sleepy Tired Hotels90,600111,700Tastee Beverages103,10083,600Total$260,400$522,000At 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 anentry, leave it blank.a. Work in ProcessSalaries Payableb. Journalize the summary entry to record the media purchases for the month. If an amount box does not require anentry, leave it blank.b. Work in ProcessAccounts Payablec. Journalize the summary entry to record the overhead applied for the month. If an amount box does not require anentry, leave it blank.c. Work in ProcessAgency Overheadd. Journalize the summary entry to record the completion of Vault Bank and Take Off Airlines for the month. If anamount box does not require an entry, leave it blank.d. Cost of ServicesWork in Process

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Description: Job Order Cost Accounting for a Service CompanyThe 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 Companyaccumulates costs for each

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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 Compa 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 a 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 August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $68,700 Take Off Airlines 20,600 Sleepy Tired Hotels 48,100 Tastee Beverages 29,500 Total $166,900 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 $46,100 $173,800

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 Compa 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 a 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 August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $68,700 Take Off Airlines 20,600 Sleepy Tired Hotels 48,100 Tastee Beverages 29,500 Total $166,900 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 $46,100 $173,800

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter2: Job Order Costing

Section: Chapter Questions

Problem 16E: Job order cost accounting for a service company The Fly Company provides advertising services for...

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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 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: August 1 Balances Vault Bank $279,200 Take Off Airlines 78,000 Sleepy Tired Hotels 219,100 Tastee Beverages 124,900 Total $701,200 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 $195,700 $712,200 Take Off…
Job Order Costing 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 $59,100 17,700 41,400 25,400 $143,600 Vault Bank Take Off Airlines Sleepy Tired Hotels Tastee Beverages Total During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Vault Bank Take Off Airlines Sleepy Tired Hotels Tastee Beverages…
Job Order Costing 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 $82,200 24,700 57,500 35,300 $199,700 Vault Bank Take Off Airlines Sleepy Tired Hotels Tastee Beverages Total During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Vault Bank Take Off Airlines Sleepy Tired Hotels Tastee Beverages…
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: See Attachment 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. Journalize the summary entry to record each of the following for the month:a. Direct labor costsb. Media purchasesc. Overhead appliedd. Completion of Vault Bank and Take Off Airlines campaigns
Using job order costing in a service company Bluebird Design, Inc. is a Web site design and consulting firm. The firm uses a job order costing system in which each client is a different job. Bluebird Design assigns direct labor, licensing costs, and travel costs directly to each job. It allocates indirect costs to jobs based on a predetermined overhead allocation rate, computed as a percentage of direct labor costs. At the beginning of 2018, managing partner Sally Simone prepared the following budget estimates: In November 2018, Bluebird Design served several clients. Records for two clients appear here: Requirements Compute Bluebird Designs direct labor rate and its predetermined overhead allocation rate for 2018. Compute the total cost of each job. If Simone wants to earn profits equal to 50% of service revenue, what fee should she charge each of these two clients? Why does Bluebird Design assign costs to jobs?
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