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. Determine each of the following for the month: a. Direct labor costs. $fill in the blank 1 b. Media purchases. $fill in the blank 2 c. Overhead applied. $fill in the blank 3
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Job Order Cost Accounting Entries for a Service BusinessMedia 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.
Determine each of the following for the month:
a. Direct labor costs.
$fill in the blank 1b. Media purchases.
$fill in the blank 2c. Overhead applied.
$fill in the blank 3d. 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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