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Jaydon Garden Jobs (JGJ) has been operating in Weston Super Mare since 2011 steady growth over the last 5 years. It is currently bidding to landscape an area and if successful, could lead to further business for JGJ. It is important tha competitive bid. The initial estimate was provided by using the market prices : which are stored on the business's automated ordering system: £ Soil 800 Wood 1,800

Jaydon Garden Jobs (JGJ) has been operating in Weston Super Mare since 2011 steady growth over the last 5 years. It is currently bidding to landscape an area and if successful, could lead to further business for JGJ. It is important tha competitive bid. The initial estimate was provided by using the market prices : which are stored on the business's automated ordering system: £ Soil 800 Wood 1,800

FINANCIAL ACCOUNTING
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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Jaydon Garden Jobs (JGJ) has been operating in Weston Super Mare since 2017 and has experienced steady growth over the last 5 years. It is currently bidding to landscape an area of parkland in Worle and if successful, could lead to further business for JGJ. It is important that JGJ puts together a competitive bid. The initial estimate was provided by using the market prices and standard charges, which are stored on the business's automated ordering system: £ Soil 800 Wood 1,800 Plants 2,400 Water Feature 3,200 Labour 1,500 Equipment 600 Overheads 1,100 TOTAL COST 11,400 The following information has also been provided: 1. The company maintains a stock of soil as it is used on almost every job. It has enough in stock for this project. The cost of soil has now risen by 10%. 2. The company has enough wood left over from another job. The company has no other use for this wood and was planning to sell to a local timber merchant for £1,200. 3. The price for the plants quoted in the above estimate is the current market value. However, the company has some plants left over from a previous job which it has just finished, this amounts to half of the plants which it requires. If it does not use these plants, they will have to be disposed and thrown away. 4. The water feature is the price quoted from their normal supplier. 5. JGJ currently has no spare capacity within their workforce and therefore two additional labourers will need to be hired. They will be paid £20 per hour, and each will work 25 hours on the project. 6. The equipment is a mini digger and the £600 represents the depreciation charge on this equipment for the project period. If the project is not undertaken, the equipment could be loaned out would earn JGJ £400. 7. The overheads represent the standard charge which JGJ applies to all jobs to help recover general overheads. Required: Using relevant costing, produce a revised cost estimate for JGJ for the landscaping project. You are required to provide a schedule showing the revised cost estimate for each item along with a brief explanation why you have OR have not included it.
Transcribed Image Text:Jaydon Garden Jobs (JGJ) has been operating in Weston Super Mare since 2017 and has experienced steady growth over the last 5 years. It is currently bidding to landscape an area of parkland in Worle and if successful, could lead to further business for JGJ. It is important that JGJ puts together a competitive bid. The initial estimate was provided by using the market prices and standard charges, which are stored on the business's automated ordering system: £ Soil 800 Wood 1,800 Plants 2,400 Water Feature 3,200 Labour 1,500 Equipment 600 Overheads 1,100 TOTAL COST 11,400 The following information has also been provided: 1. The company maintains a stock of soil as it is used on almost every job. It has enough in stock for this project. The cost of soil has now risen by 10%. 2. The company has enough wood left over from another job. The company has no other use for this wood and was planning to sell to a local timber merchant for £1,200. 3. The price for the plants quoted in the above estimate is the current market value. However, the company has some plants left over from a previous job which it has just finished, this amounts to half of the plants which it requires. If it does not use these plants, they will have to be disposed and thrown away. 4. The water feature is the price quoted from their normal supplier. 5. JGJ currently has no spare capacity within their workforce and therefore two additional labourers will need to be hired. They will be paid £20 per hour, and each will work 25 hours on the project. 6. The equipment is a mini digger and the £600 represents the depreciation charge on this equipment for the project period. If the project is not undertaken, the equipment could be loaned out would earn JGJ £400. 7. The overheads represent the standard charge which JGJ applies to all jobs to help recover general overheads. Required: Using relevant costing, produce a revised cost estimate for JGJ for the landscaping project. You are required to provide a schedule showing the revised cost estimate for each item along with a brief explanation why you have OR have not included it.
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