Randi Garner, of Garner Office Designs, designs and installs custom office furniture for busi¬ nesses throughout the state. Each job is different, and each requires different materials and labor for making the desks and counter areas. Garner Office Designs estimated the follow¬ ing for the year;

Required:
1. Should Garner Office Designs use process costing or job-order costing? Explain.
2. If Garner Office Designs uses a normal costing system and overhead is applied on the basis of direct labor hours, what is the cost of an installation that takes $3,500 of direct materials and 30 direct labor hours?
3. Explain why Gamer Office Designs would have difficulty using an actual costing system.

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Number of installations Number of direct labor hours Direct material cost Direct labor cost Overhead cost 50 3,000 $200,000 $54,000 $60,000 During the year the following actual amounts were experienced: Number of installations 45 Number of direct labor hours 3,050 Direct materials used $198,000 Direct labor incurred $54,900 Overhead $60,300