Kurumsal Finans ve Strateji Rehberi | Finance & Strategy Insights

The digital marketing sector continues to grow and become increasingly specialized. In this competitive environment, accurate costing strategies are vital, especially for boutique agencies. TekilPro Digital Agency, which offers web design and social media management services, provides customized solutions for each client. This article examines how the company calculates costs under its job order costing system and determines its pricing strategy.

Scenario: TekilPro Digital Agency

TekilPro Digital Agency treats each client project as a separate job and applies a job order costing system. The company directly assigns direct labor, software licensing costs, and travel expenses to clients, while allocating manufacturing overhead costs using a predetermined overhead rate.

At the beginning of 2024, company partner Can Bey prepared the following budget estimates:

• Direct Labor Hours: 8,500 hours
• Direct Labor Cost: ₺1,700,000
• Support Staff Cost: ₺680,000
• Computer Leasing Expense: ₺45,000
• Office Supplies: ₺22,000
• Office Rent Expense: ₺55,000

Information for two key clients served in December is as follows:

	Delta Inc.	Gamma Inc.
Direct Labor Hours	720 hours	280 hours
Licensing Cost	₺1,450	₺650
Travel Expenses	₺12,000	₺0

a. Calculation of Predetermined Overhead Rate

The first step is to calculate total manufacturing overhead (MOH) and direct labor cost.

Total MOH Calculation:

Support Staff: ₺680,000  
Computer Leasing: ₺45,000  
Office Supplies: ₺22,000  
Office Rent: ₺55,000  
Total MOH = ₺680,000 + ₺45,000 + ₺22,000 + ₺55,000 = ₺802,000  

Direct Labor Hourly Rate:

Direct Labor Hourly Rate = Total Direct Labor Cost / Total Direct Labor Hours  
Direct Labor Hourly Rate = ₺1,700,000 / 8,500 hours = ₺200/hour  

Predetermined Overhead Rate:

Predetermined Overhead Rate = (Total MOH / Total Direct Labor Cost) × 100  
Predetermined Overhead Rate = (₺802,000 / ₺1,700,000) × 100 = 47.18%  

b. Client-Specific Cost Calculations

Delta Inc. Cost Calculation:

Direct Labor: 720 hours × ₺200/hour = ₺144,000  
Licensing Cost: ₺1,450  
Travel Expenses: ₺12,000  
Total Direct Costs: ₺144,000 + ₺1,450 + ₺12,000 = ₺157,450  

Manufacturing Overhead: ₺144,000 × 47.18% = ₺67,939.20  
Total Cost: ₺157,450 + ₺67,939.20 = ₺225,389.20  

Gamma Inc. Cost Calculation:

Direct Labor: 280 hours × ₺200/hour = ₺56,000  
Licensing Cost: ₺650  
Travel Expenses: ₺0  
Total Direct Costs: ₺56,000 + ₺650 + ₺0 = ₺56,650  

Manufacturing Overhead: ₺56,000 × 47.18% = ₺26,420.80  
Total Cost: ₺56,650 + ₺26,420.80 = ₺83,070.80  

c. Invoice Amount Calculation with Target Profit Margin

Can Bey wants 50% of the amount collected from Delta Inc. to remain as profit. Therefore:

Total Cost × 2 = Invoice Amount  
₺225,389.20 × 2 = ₺450,778.40  

The invoice amount to be issued to Delta Inc. should be ₺450,778.40.

Conclusion and Evaluation

TekilPro Digital Agency’s costing methodology can inspire other businesses in the service sector. The job order costing system applied by the company accurately reflects each client’s true cost and enables healthy pricing.

Key Takeaways:

1. Tracking Direct Costs: Monitoring direct labor, licensing, and travel expenses on a client basis is crucial for cost control.
2. Fair Distribution of Overhead: Using a predetermined overhead rate ensures indirect costs are fairly distributed among clients.
3. Profit-Targeted Pricing: Accurate cost calculation allows for correct pricing to achieve target profit margins.

This system offers an applicable model not only for digital agencies but also for all businesses that provide consulting services, work on a project basis, and offer customized services.