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Mr. Ioannis Pazmatzis Course title: Financial Reporting, Management Accounting, Financial Strategy Management Accounting Cost Allocation Graffiti/BBDO Sofia Dessislava Pencheva MBA Executive Cohort 8a C O N T E N T 1. Abstract 2. Introduction 2.1.Company Overview 2.2. Organizational Structure 2.3. Management Control & Decision Making 3. Problem definition 4. Possible solutions or How to estimate the cost of services? 4.1 Cost Driver 4.2 Variable & Fixed Costs 4.3 Cost Centres, Cost Pools & Profit Centres 5. Budgets & Control on Engagements 5.1. Activity Based Costing 5.2. Classifications on Overhead Rates 6. Can Graffiti/BBDO Sofia bear new clients or no? 6.1 Capacity Decisions 6.2. Pricing Decisions 7. Conclusion 8. References ABSTRACT The advertising business in Bulgaria is in its early teenage years. However, 12 years after the fall of the communist regime the advertising industry in Bulgaria experiences a boom. The competitiveness of the market implies flexibility and correct cost allocation, pricing and capacity decisions. There are different ways the client in a service industry such as the advertising to be...

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