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 60% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances
Vault Bank $86,900
Take Off Airlines 26,300
Sleepy Tired Hotels 61,300
Tastee Beverages 37,700
Total $212,900
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 $61,600 $233,400 Vault Bank 27,500 205,400 Take Off Airlines 121,000 150,000 Sleepy Tired Hotels 137,700 112,200 Tastee Beverages $347,800 $701,000 Total 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. a. Journalize the summary entry to record the direct labor costs for the month. If an amount box does not require an entry, leave it blank.