Reference no: EM132684528

Problem - Job order cost accounting entries for a service business

The Pedersen Company provides advertising services for clients across the nation. The Pedersen Company is presently working on four projects, each for a different client. The Pedersen 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 March 1, the four advertising projects had the following accumulated costs:

During March, The Pedersen Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts:

At the end of March, both the Hedge Bank and Sullivan Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account.

Required - Journalize the summary entry to record each of the following for the month:

a. Direct labor costs

b. Media Purchases

c. Overhead applied

d. Completion of Hedge Bank and Sullivan Airlines campaigns