Job Order Cost Sheet Cheng Furniture Company refinishes and reupholsters furniture. Cheng Furniture 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 September 3, 2014, an estimate of $3,050 for reupholstering a sofa and loveseat was given to John Jobs. The estimate was based on the following data: On September 6, the sofa and loveseat were picked up from the residence of John Jobs, 220 Apple Lane, Cupertino, CA, with a commitment to return it on October 31. The job was completed on October 28. The related materials requisitions and time tickets are summarized as follows: 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 John Jobs Date Sept. 3, 2014 Address 220 Apple Lane Date wanted Oct. 31, 2014 Cupertino, CA Date completed Oct. 28, 2014 Item Reupholster sofa and loveseat Job. No. ESTIMATE Direct Materials Direct Labor Summary Amount Amount Amount 40 meters at $25 30 hours at $30 Direct Materials Direct Labor Factory Overhead Total Total Total cost ACTUAL Direct Materials Direct Labor Summary Mat. Req. No. Description Amount Time Ticket No. Description Amount Item Amount 508 18 Meters at $ 25 H40 14 Hours at $ 30 Direct Materials Direct Labor 510 25 Meters at $ 25 H43 20 Hours at $ 30 Factory Overhead Total Total Total Cost What is the best explanation for the variances between actual costs and estimated costs. (For this purpose, assume that three meters of materials were spoiled, the factory overhead rate has been proved to be satisfactory, and an inexperienced employee performed the work.) The direct materials cost exceeded the estimate by $75 because 3 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. Management didn't provide enough direction to complete tasks on budget. The direct materials cost exceeded the estimate by $75 because 3 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. Select the correct answer from the above choices.