Brand Value Advertisements Pty Ltd, a marketing firm, uses a job order costing system to charge its

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Brand Value Advertisements Pty Ltd, a marketing firm, uses a job order costing system to charge its clients. The firm specialises in marketing work for small local businesses in Melbourne such as tradespeople and small shops that are not associated with national franchises. The cost data for March were as follows.image text in transcribed

Brand Value Advertisements Pty Ltd applies office overhead costs to advertising jobs at 90% of the direct labour charge. Once the total cost of a job is determined, the firm marks up the costs by 40% to calculate the amount charged to the client.
Required

(a) Calculate the total amount charged to clients’ accounts during March.

(b) Were office overhead costs over or under applied for the month of March?

(c) What factors could cause an over or under application of overhead costs during a particular month?

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Accounting

ISBN: 9780730382737

11th Edition

Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie

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