The Ad Guys Inc. provides advertising services for clients across the nation. The Ad Guys is presently working on four projects, each for a different client. The Ad Guys 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 50% of media purchases. On June 1, the four advertising projects had the following accumulated costs:

June 1 Balances

Clinton Bank $80,000

Pryor Airlines 24,000

O?Ryan Hotels 56,000

Marshall Beverages 34,000

During June, The Ad Guys incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts:

At the end of June, both the Clinton Bank and Pryor Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account. Journalize the summary entry to record each of the following for the month:a. Direct labor costsb. Media purchasesc. Overhead appliedd. Completion of Clinton Bank and Pryor Airlinescampaigns

Transcribed Image Text:

Direct Labor Media Purchases $ 56,000 25,000 110,000 125,000 $316,000 Clinton Bank Pryor Airlines O'Ryan Hotels Marshall Beverages Total $210,000 135,000 101,000 $631,000