Job Order Cost Accounting Entries for a Service Business Media Connect Inc. provides advertising services for clients across the nation. Media Connect is presently working on four projects, each for a different client. Media Connect 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 55% of media purchases. On April 1, the four advertising projects had the following accumulated costs: April 1 Balances First Bank $56,000 Reliable Airlines 16,800 Motel 26 39,200 Blue Mountain Beverages 24,100 During April, Media Connect incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases First Bank $36,700 $149,500 Reliable Airlines 16,400 131,600 Motel 26 72,100 96,100 Blue Mountain Beverages 82,000 71,800 At the end of April, both the First Bank and Reliable Airlines campaigns were completed. The costs of completed campaigns are added to the cost of services account. d. Cost of completed First Bank and Reliable Airlines campaigns. Total Costs First Bank $fill in the blank 4 Reliable Airlines $fill in the blank 5

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Job Order Cost Accounting Entries for a Service Business

Media Connect Inc. provides advertising services for clients across the nation. Media Connect is presently working on four projects, each for a different client. Media Connect 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 55% of media purchases. On April 1, the four advertising projects had the following accumulated costs:

	April 1 Balances
First Bank	$56,000
Reliable Airlines	16,800
Motel 26	39,200
Blue Mountain Beverages	24,100

During April, Media Connect incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts:

	Direct Labor	Media Purchases
First Bank	$36,700		$149,500
Reliable Airlines	16,400		131,600
Motel 26	72,100		96,100
Blue Mountain Beverages	82,000		71,800

At the end of April, both the First Bank and Reliable Airlines campaigns were completed. The costs of completed campaigns are added to the cost of services account.

d. Cost of completed First Bank and Reliable Airlines campaigns.

	Total Costs
First Bank	$fill in the blank 4
Reliable Airlines	$fill in the blank 5

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