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 theestimated 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 futurejobs. On May 9, Stretch and Trim gave Lunden Consulting an estimate of $18,044 to carpet the consulting firm's newly leased office. The estimate was based on thefollowing data:Estimated direct materials:400 meters at $32 per meter$12,800Estimated direct labor:30 hours at $20 per hour600Estimated factory overhead (80% of direct labor cost)480Total estimated costs$13,880Markup (30% of production costs)4,164Total estimate$18,044On May 10, Lunden Consulting signed a purchase contract, and the carpet was delivered and installed on May 15.The related materials requisitions and time tickets are summarized as follows:Materials Requisition No.DescriptionAmount132360 meters at $32$11,52013450 meters at $321,600Time Ticket No.DescriptionAmountH918 hours at $19$342H1218 hours at $19342 ACTUALDirect MaterialsDirect LaborSummaryMat. Req. No.DescriptionAmountTime Ticket No.DescriptionAmountItemAmountDirect Materials132360 meters at $32H918 hours at $19Direct Labor13450 meters at $32H1218 hours at $19Factory OverheadTotalTotalTotal CostFeedbackV Check My Work1 & 2. Include the estimated and actual direct materials and direct labor. Include the estimated and applied factory overhead.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 jobwere 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 $40 because 2 meters of materials were spoiled.b. Management didn't provide enough direction to complete tasks on budget.c. The direct materials cost exceeded the estimate by $320 because 10 meters of materials were spoiled. The direct labor cost exceeded the estimate by $84 because anadditional 6 hours of labor were used by inexperienced employees who worked for $1 less per hour. The factory overhead cost exceeded the estimate because anadditional $67 of factory overhead was allocated because of the increase in direct labor.d. Cannot be determined from the information provided.e. The direct labor cost exceeded the estimate by $130 because an additional 6 hours of labor were used by an inexperienced employee who worked for $1 less per hour.

Name: assigned to the job, and the costs incurred are recorded in the usual
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Description: 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 theestimated and actual costs are noted on the sheet. The data are then available to ma

In the given question we are provided with the estimated direct material and direct labor and the…

Business

Accounting

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 May 9, Stretch and Trim gave Lunden Consulting an estimate of $18,044 to carpet the consulting firm's newly leased office. The estimate was based on the following data: Estimated direct materials: 400 meters at $32 per meter $12,800 Estimated direct labor: 30 hours at $20 per hour 600 Estimated factory overhead (80% of direct labor cost) 480 Total estimated costs $13,880 Markup (30% of production costs) 4,164 Total estimate $18,044 On May 10, Lunden Consulting signed a purchase contract, and the carpet was delivered and installed on May 15. The related materials requisitions and time tickets are summarized as follows: Materials Requisition No. Description Amount 132 360 meters at $32 $11,520 134 50 meters at $32 1,600 Time Ticket No. Description Amount H9 18 hours at $19 $342 H12 18 hours at $19 342

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 May 9, Stretch and Trim gave Lunden Consulting an estimate of $18,044 to carpet the consulting firm's newly leased office. The estimate was based on the following data: Estimated direct materials: 400 meters at $32 per meter $12,800 Estimated direct labor: 30 hours at $20 per hour 600 Estimated factory overhead (80% of direct labor cost) 480 Total estimated costs $13,880 Markup (30% of production costs) 4,164 Total estimate $18,044 On May 10, Lunden Consulting signed a purchase contract, and the carpet was delivered and installed on May 15. The related materials requisitions and time tickets are summarized as follows: Materials Requisition No. Description Amount 132 360 meters at $32 $11,520 134 50 meters at $32 1,600 Time Ticket No. Description Amount H9 18 hours at $19 $342 H12 18 hours at $19 342

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machining Customizing Machine-hours 16,000 11,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 104,000 $ 56,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.30 During the current month the company started and finished Job T272. The following data were recorded for this job: Job T272: Machining Customizing Machine-hours 60 30 Direct labor-hours 10 60 The predetermined overhead rate for the Machining…
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