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 $2,828 to carpet the consulting firms newly leased office. The estimate was based on the following data:

Line Item Description	Amount
Estimated direct materials: 40 meters at $33 per meter	$1,320
Estimated direct labor: 20 hours at $20 per hour	400
Estimated factory overhead (75% of direct labor cost)	300
Total estimated costs	$2,020
Markup (40% of production costs)	808
Total estimate	$2,828

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
112	20 meters at $33	$660
114	24 meters at $33	792

Time Ticket No.	Description	Amount
H10	10 hours at $20	$200
H11	14 hours at $20	280

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 $33	fill in the blank 1 of 18$	20 Hours at $20	fill in the blank 2 of 18$	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
112	20 Meters at $33	fill in the blank 9 of 18$	H10	10 Hours at $20	fill in the blank 10 of 18$	Direct Materials	fill in the blank 11 of 18$
						Direct Labor	fill in the blank 12 of 18
114	24 Meters at $33	fill in the blank 13 of 18	H11	14 Hours at $20	fill in the blank 14 of 18	Factory Overhead	fill in the blank 15 of 18
Total		fill in the blank 16 of 18$	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 $132 because 4 meters of materials were spoiled. The direct labor cost exceeded the estimate by $80 because an additional 4 hours of labor were used by an inexperienced employee. The factory overhead cost exceeded the estimate because an additional $60 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.

abcd