Job Cost Sheet

Remnant Carpet Company sells and installs commercial carpeting for office buildings. Remnant Carpet Company uses job order costing. 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 $$3,794$ to carpet the consulting firm$$s newly leased office. The estimate was based on the following data:

Line Item Description Amount

Estimated direct materials:

$40$ meters at $$31$ per meter $$1,240$

Estimated direct labor:

$28$ hours at $$30$ per hour $840$

Estimated factory overhead $(75\%$ of direct labor cost$)630$

Total estimated costs $$2,710$

Markup $(40\%$ of production costs$)1,084$

Total estimate $$3,794$

On October $3,$ Jackson Consulting signed a purchase contract, and the delivery and installation were completed on October $10.$

The related materials requisitions and time tickets are summarized as follows:

Materials Requisition No$.$ Description Amount

$11220$ meters at $$31$ $$620$

$11424$ meters at $$31744$

Time Ticket No$.$ Description Amount

H$1014$ hours at $$30$ $$420$

H$1118$ hours at $$30540$

Required:

Question Content Area

Enter amounts as positive numbers.

$1.$ Complete that portion of the job cost sheet that would be prepared when the estimate is given to the customer.

$2.$ Record the costs incurred, and complete the job cost sheet.

JOB COST SHEET

Customer Jackson Consulting Date October $1$

Date wanted October $10$

Date completed October $10$

Job. No$.$

ESTIMATE

Direct Materials Direct Materials

Amount Direct Labor Direct Labor

Amount Summary Summary

Amount

$40$ Meters at $$31$ fill in the blank $1$ of $18$$

$28$ Hours at $$30$ fill in the blank $2$ of $18$$

Direct Materials fill in the blank $3$ of $18$$

Direct Labor fill in the blank $4$ of $18$

Factory Overhead fill in the blank $5$ of $18$

Total fill in the blank $6$ of $18$$

Total fill in the blank $7$ of $18$$

Total cost fill in the blank $8$ of $18$$

ACTUAL

Direct Materials

Mat. Req. No$.$ Direct Materials

Description Direct Materials

Amount Direct Labor

Time Ticket No$.$ Direct Labor

Description Direct Labor

Amount Summary

Item Summary

Amount

$11220$ Meters at $$31$ fill in the blank $9$ of $18$$

H$1014$ Hours at $$30$ fill in the blank $10$ of $18$$

Direct Materials fill in the blank $11$ of $18$$

Direct Labor fill in the blank $12$ of $18$

$11424$ Meters at $$31$ fill in the blank $13$ of $18$

H$1118$ Hours at $$30$ fill in the blank $14$ of $18$

Factory Overhead fill in the blank $15$ of $18$

Total fill in the blank $16$ of $18$$

Total fill in the blank $17$ of $18$$

Total Cost fill in the blank $18$ of $18$$

Question Content Area

What is the best explanation for the variances between actual costs and estimated costs. $($For this purpose, assume that the additional meters of material used in the job were spoiled, the factory overhead rate has proven to be satisfactory, and an inexperienced employee performed the work.$)$

a$.$ The direct materials cost exceeded the estimate by $$124$ because $4$ meters of materials were spoiled. The direct labor cost exceeded the estimate by $$120$ because an additional $4$ hours of labor were used by an inexperienced employee. The factory overhead cost exceeded the estimate because an additional $$90$ of factory overhead was allocated because of the increase in direct labor.

b$.$ Management didn't provide enough direction to complete tasks on budget.

c$.$ The direct materials cost exceeded the estimate by $$75$ because $3$ meters of materials were spoiled.

d$.$ The direct labor cost exceeded the estimate by $$120$ because an additional $4$ hours of labor were used by an inexperienced employee.

Select the correct answer from the above choices.Job Cost Sheet

$$3,794$ to carpet the consulting firm's newly leased ofrice. The estimate was based on the following data:

Estimated direct materials:

$40$ meters at $$31$ per meter

Estimated direct labor:

$28$ hours at $$30$ per hour

Estimated factory overhead $(75\%$ of direct labor cost$)$

Total estimated costs

Markup $(40\%$ of production costs$)$

Total estimate

On October $3,$ Jackson Consulting signed a purchase contract, and the dellivery and installation were completed on October $10.$

The related materials requisitions and time tickets are summarized as follows:

Required:

Enter amounts as positive numbers.

Complete that portion of the job cost sheet that would be prepared when the estimate is given to the customer.

Record the costs incurred, and complete the job cost sheet.

JOB COST SHEET

ACTUAL