Question
Job Order Cost Sheet Remnant Carpet Company sells and installs commercial carpeting for office buildings. Remnant Carpet Company uses a job order cost system. When
Job Order 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 $9,450 to carpet the consulting firms newly leased office. The estimate was based on the following data:
Estimated direct materials: | |
200 sq. ft. at $35 per sq. ft | $7,000 |
Estimated direct labor: | |
16 hours at $20 per hour | 320 |
Estimated factory overhead (75% of direct labor cost) | 240 |
Total estimated costs | $7,560 |
Markup (25% of production costs) | 1,890 |
Total estimate | $9,450 |
On October 3, Jackson Consulting signed a purchase contract, and the delivery and installation was completed on October 10.
The related materials requisitions and time tickets are summarized as follows:
Materials Requisition No. | Description | Amount | |
112 | 140 sq. ft. at $35 | $4,900 | |
114 | 68 sq. ft. at $35 | 2,380 |
Time Ticket No. | Description | Amount | |
H10 | 10 hours at $20 | $200 | |
H11 | 10 hours at $20 | 200 |
Required:
Question Content Area
Enter amounts as positive numbers.
1. Complete that portion of the job order cost sheet that is 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 | |||||||||||||||||||||
| |||||||||||||||||||||
Direct Materials | Direct Labor | Summary | |||||||||||||||||||
Amount | Amount | Amount | |||||||||||||||||||
200 sq. ft. at $35 | $fill in the blank 7761f105b075073_1 | 16 Hours at $20 | $fill in the blank 7761f105b075073_2 | Direct Materials | $fill in the blank 7761f105b075073_3 | ||||||||||||||||
Direct Labor | fill in the blank 7761f105b075073_4 | ||||||||||||||||||||
Factory Overhead | fill in the blank 7761f105b075073_5 | ||||||||||||||||||||
Total | $fill in the blank 7761f105b075073_6 | Total | $fill in the blank 7761f105b075073_7 | Total cost | $fill in the blank 7761f105b075073_8 | ||||||||||||||||
ACTUAL | |||||||||||||||||||||
Direct Materials | Direct Labor | Summary | |||||||||||||||||||
Mat. Req. No. | Description | Amount | Time Ticket No. | Description | Amount | Item | Amount | ||||||||||||||
112 | 140 sq. ft. at $35 | $fill in the blank 7761f105b075073_9 | H10 | 10 Hours at $20 | $fill in the blank 7761f105b075073_10 | Direct Materials | $fill in the blank 7761f105b075073_11 | ||||||||||||||
Direct Labor | fill in the blank 7761f105b075073_12 | ||||||||||||||||||||
114 | 68 sq. ft. at $35 | fill in the blank 7761f105b075073_13 | H11 | 10 Hours at $20 | fill in the blank 7761f105b075073_14 | Factory Overhead | fill in the blank 7761f105b075073_15 | ||||||||||||||
Total | $fill in the blank 7761f105b075073_16 | Total | $fill in the blank 7761f105b075073_17 | Total Cost | $fill in the blank 7761f105b075073_18 |
Question Content Area
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 $280 because 8 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.
- 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.
abcd
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started