San Diego State University Operations And Supply Chain Management Assignment Help - Basis risk

Question - 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……………ââ ...Read More ‚¬Â¦Ã¢â‚¬Â¦.. 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.
Determine each of the following for the month:
a. Direct labor costs.
b. Media purchases.
c. Overhead applied.
d. Completion of Clinton Bank and Pryor Airlinescampaigns.
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