Job order cost sheet
Remnant Carpet company sells and installs commercial carpeting for office buildings. Remnant Carpel Company uses a job order cost system. When a prosective 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 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 Firm's 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(2S% of production cost) |
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 requies and time tickets are summarized as follows:
Materials Requisiton No. |
Description |
Amount |
112 |
140sq.ft. at $35 |
$4,900
|
114 |
68 sq.ft. at $35 |
2380 |
Time Ticket No. |
Description |
Amount |
H10 |
10hours at $20 |
$200 |
H11 |
10hours at $20 |
200 |
Instructions
1.Complete that portion of the job order cost sheet that is prepared when the estimate is given to the customer.
2.Record the costs incurred and prepare a job order cost sheet. Comment on the reasons for the variances between actual costs aand estimated costs. For this purpose, assume that the additional square feet of material used in the job were spoiled, the factory overhead rate has proven to be satisfactory, and an inexperienced employee performed the work.