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Job Order Cost Accounting 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 (dlient) 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 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: $270,000 80,000 210,000 115,000 $675,000 Direct Labor Media Purchases Vault Bank Take Off Airlines Sleepy Tired Hotels Tastee Beverages Total $190,000 85,000 372,000 421,000 $1,068,000 $710,000 625,000 455,000 340,000 $2,130,000 At the end of August, both the Vault Bank and account. Take Off Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services a. Journalize the summary entry to record the direct labor costs for the month. a Work in Process Feedback a Increase the work in process for the direct costs and the applied overhead Applied overhead should be based on media purchases b. Journalize the summary entry to record the media purchases for the month b. Work in Process Accounts Payable Feedback Check My Work b Increase the work in process for the direct costs and the applied overhoad Applied ovorhead should be based on media purchases c. Journalize the summary entry to record the overhead applied for the month. c. Work in Process Agency Overhead Feedback c Iroease te work r' process for the direct costs and the appled overhead Applied overhead should be based on media purchases. d. Journalize the summary entry to record the completion of Vault Bank and Take Off Airlines campaigns for the month. d Cost of Services Work in Process Feedback Partially correct Feedback

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