Job 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 $1,098 to carpet the consulting firm's newly leased office. The estimate was based on the following data Estimated direct materials: 30 meters at $30 per meter $ 900 Estimated direct labor: 16 hours at $20 per hour 320 Estimated factory overhead (75% of direct labor cost) 240 Total estimated costs $1,460 Markup (30% of production costs) 438 Total estimate $1,898 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 15 meters at $30 $450 114 19 meters at $30 570 Time Ticket No. Description Amount Ch 16 Homework eBook Calculator 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 15 meters at $30 $450 114 19 meters at $30 570 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 Date wanted October 10 Date completed Job. No. October 10 ESTIMATE Check My Work ESTIMATE Direct Materials Direct Labor Summary Amount Amount Amount 30 Meters at $30 16 Hours at $20 Direct Materials Direct Labor Factory Overhead Total Total Total cost ACTUAL Direct Materials Direct Labor Mat. Reg. No. Description Amount Time Ticket No. Description Amount Summary Item Amount Direct Materials s 112 15 Meters at $30 H10 8 Hours at $20 $ Direct Labor 114 19 Meters at $30 H11 12 Hours at $20 Factory Overhead Total $ Total $ Total Cost 5 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 $120 because 4 meters of materials were spoded. 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