Chapter 19 Work Job Order Cost Sheet Remnant Carpet Company sells and installs commercial carpeting for office buildings. Remnant Carpet Company uses a job order cost system. When a prospective customer asks for a price quote on a job, the estimated cost data are inserted on an unnumbered job cost sheet. If the offer is accepted, a number is assigned to the job, and the costs incurred are recorded in the usual manner on the job cost sheet. After the job is completed, reasons for the variances between the estimated and actual costs are noted on the sheet. The data are then available to management in evaluating the efficiency of operations and in preparing quotes on future jobs. On October 1, Remnant Carpet Company gave Jackson Consulting an estimate of $2,128 to carpet the consulting firm's newly leased office. The estimate was based on the following data: Estimated direct materials: 30 sq. ft. at $32 per sq. ft. $ 960 Estimated direct labor: 16 hours at $20 per hour 320 Estimated factory overhead (75% of direct labor cost) 240 Total estimated costs $1,520 Markup (40% of production costs) 608 Total estimate $2,128 On October 3, Jackson Consulting signed a purchase contract, and the delivery and installation was completed on October 10. The related materials requisitions and time tickets are summarized as follows: Materials Requisition No. Description Amount 112 15 sq. ft. at $32 $480 114 19 sq. ft. at $32 608 Time Ticket No. Description Amount H10 8 hours at $20 $160 Previous Check My Work 3 more Check My Work uses remaining. All work saved. Save and Exit Submit Assignment for Grading Assignment Score: 38.71% Chapter 19 Work eBook Calculator Time Ticket No. Description Amount H10 8 hours at $20 $160 H11 12 hours at $20 240 Required: Enter amounts as positive numbers. 1. Complete that portion of the job order cost sheet that would be prepared when the estimate is given to the customer. 2. Record the costs incurred and complete the job order cost sheet. JOB ORDER COST SHEET Customer Jackson Consulting Date October 1 October 10 Date wanted Date completed Job. No October 10 ESTIMATE Direct Materials Direct Labor Summary Amount Amount 30 sq. ft. at $32 Amount 16 Hours at $20 Direct Materials Direct Labor Factory Overhead Tetal Total Total cost ACTUAL Direct Materials Direct Labor Summary Check My Work Smare Check My Wok remaining Personalized Belly- Leandre Griffin Use Chapter 19 Work ebook Calculator Direct Materials Direct Labor Summary Amount Amount 30 sq. ft. at $32 Amount 16 Hours at $20 Direct Materials Direct Labor Total Factory Overhead Total Total cost ACTUAL Direct Materials Description Mat. Reg. No. Amount Direct Labor Description Summary Time Ticket No. Amount Item Amount 310 15 ft 32 HIO 8 Hours at $20 Direct Materials 312 19 se. It at $32 Direct Labor H11 12 Hours at 520 Tots Factory Overhead Total $ Total Cost What is the best explanation for the variances between actual costs and estimated costs? (For this purasume that the additional square feet of material used in the job were spoiled, the factory ow an inexperienced employee performed the work) The direct materials cost exceeded the estimate by $120 Dec feet of materials were spoiled. The direct labor cost exceeded the estimate by $80 because an additional 4 hours of labor we overhead cont exceeded the estimate because an additional $60 of factory overhead was located because of the increase in drect labor b. Management didn't provide enough direction to complete tasks on budget The drett materials cost exceeded the estimate by because are feet of materials were spoiled d. The direct labor cost aceeded the estimate by 5240 because an additional 4 hours of labor were used by an inexperienced employee. Select the correct answer from the above choices
