Characteristics of Production Process, Cost Measurement Vince Kim, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year: Number of direct labor hours Direct labor cost 6,720 Overhead cost $67,200 $50,400 During the year, the following actual amounts were experienced: Number of direct labor hours Direct labor incurred Overhead incurred 6,045 $66,495 $50,500 Vince Kim, owner of EcoScape, noticed that the watering systems for many houses in a local subdivision had the same layout and required virtually identical amounts of prime cost. Vince met with the subdivision builders and offered to install a basic watering system in each house. The idea was accepted enthusiastically, so Vince created a new company, Irrigation Specialties, to handle the subdivision business. In its first three months in business, Irrigation Specialties experienced the following: June Number of systems installed 60 Direct materials used $18,000 July 80 $24,000 August 120 $36,000