Job 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 $3,668 to carpet the consulting firm’s newly leased office. The estimate was based on the following data: Estimated direct materials: 40 meters at $34 per meter $ 1,360 Estimated direct labor: 24 hours at $30 per hour 720 Estimated factory overhead (75% of direct labor cost) 540 Total estimated costs $2,620 Markup (40% of production costs) 1,048 Total estimate $3,668 On October 3, Jackson Consulting signed a purchase contract, and the delivery and installation were completed on October 10. The related materials requisitions and time tickets are summarized as follows: Materials Requisition No. Description Amount 112 20 meters at $34 $680 114 24 meters at $34 816 Time Ticket No. Description Amount H10 12 hours at $30 $360 H11 16 hours at $30 480 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 Jackson Consulting Date October 1 Date wanted October 10 Date completed October 10 Job. No. ESTIMATE Direct Materials Direct Labor Summary Amount Amount Amount 40 Meters at $34 $fill in the blank bb43e8043fdafd3_1 24 Hours at $30 $fill in the blank bb43e8043fdafd3_2 Direct Materials $fill in the blank bb43e8043fdafd3_3 Direct Labor fill in the blank bb43e8043fdafd3_4 Factory Overhead fill in the blank bb43e8043fdafd3_5 Total $fill in the blank bb43e8043fdafd3_6 Total $fill in the blank bb43e8043fdafd3_7 Total cost $fill in the blank bb43e8043fdafd3_8 ACTUAL Direct Materials Direct Labor Summary Mat. Req. No. Description Amount Time Ticket No. Description Amount Item Amount 112 20 Meters at $34 $fill in the blank bb43e8043fdafd3_9 H10 12 Hours at $30 $fill in the blank bb43e8043fdafd3_10 Direct Materials $fill in the blank bb43e8043fdafd3_11 Direct Labor fill in the blank bb43e8043fdafd3_12 114 24 Meters at $34 fill in the blank bb43e8043fdafd3_13 H11 16 Hours at $30 fill in the blank bb43e8043fdafd3_14 Factory Overhead fill in the blank bb43e8043fdafd3_15 Total $fill in the blank bb43e8043fdafd3_16 Total $fill in the blank bb43e8043fdafd3_17 Total Cost $fill in the blank bb43e8043fdafd3_18 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 job were spoiled, the factory overhead rate has proven to be satisfactory, and an inexperienced employee performed the work.) The direct materials cost exceeded the estimate by $136 because 4 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. The factory overhead cost exceeded the estimate because an additional $90 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.

Job 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 $3,668 to carpet the consulting firm’s newly leased office. The estimate was based on the following data: Estimated direct materials: 40 meters at $34 per meter $ 1,360 Estimated direct labor: 24 hours at $30 per hour 720 Estimated factory overhead (75% of direct labor cost) 540 Total estimated costs $2,620 Markup (40% of production costs) 1,048 Total estimate $3,668 On October 3, Jackson Consulting signed a purchase contract, and the delivery and installation were completed on October 10. The related materials requisitions and time tickets are summarized as follows: Materials Requisition No. Description Amount 112 20 meters at $34 $680 114 24 meters at $34 816 Time Ticket No. Description Amount H10 12 hours at $30 $360 H11 16 hours at $30 480 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 Jackson Consulting Date October 1 Date wanted October 10 Date completed October 10 Job. No. ESTIMATE Direct Materials Direct Labor Summary Amount Amount Amount 40 Meters at $34 $fill in the blank bb43e8043fdafd3_1 24 Hours at $30 $fill in the blank bb43e8043fdafd3_2 Direct Materials $fill in the blank bb43e8043fdafd3_3 Direct Labor fill in the blank bb43e8043fdafd3_4 Factory Overhead fill in the blank bb43e8043fdafd3_5 Total $fill in the blank bb43e8043fdafd3_6 Total $fill in the blank bb43e8043fdafd3_7 Total cost $fill in the blank bb43e8043fdafd3_8 ACTUAL Direct Materials Direct Labor Summary Mat. Req. No. Description Amount Time Ticket No. Description Amount Item Amount 112 20 Meters at $34 $fill in the blank bb43e8043fdafd3_9 H10 12 Hours at $30 $fill in the blank bb43e8043fdafd3_10 Direct Materials $fill in the blank bb43e8043fdafd3_11 Direct Labor fill in the blank bb43e8043fdafd3_12 114 24 Meters at $34 fill in the blank bb43e8043fdafd3_13 H11 16 Hours at $30 fill in the blank bb43e8043fdafd3_14 Factory Overhead fill in the blank bb43e8043fdafd3_15 Total $fill in the blank bb43e8043fdafd3_16 Total $fill in the blank bb43e8043fdafd3_17 Total Cost $fill in the blank bb43e8043fdafd3_18 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 job were spoiled, the factory overhead rate has proven to be satisfactory, and an inexperienced employee performed the work.) The direct materials cost exceeded the estimate by $136 because 4 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. The factory overhead cost exceeded the estimate because an additional $90 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.

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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Question

Job 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 $3,668 to carpet the consulting firm’s newly leased office. The estimate was based on the following data:

Estimated direct materials:
40 meters at $34 per meter	$ 1,360
Estimated direct labor:
24 hours at $30 per hour	720
Estimated factory overhead (75% of direct labor cost)	540
Total estimated costs	$2,620
Markup (40% of production costs)	1,048
Total estimate	$3,668

On October 3, Jackson Consulting signed a purchase contract, and the delivery and installation were completed on October 10.

The related materials requisitions and time tickets are summarized as follows:

Materials Requisition No.	Description	Amount
112	20 meters at $34	$680
114	24 meters at $34	816

Time Ticket No.	Description	Amount
H10	12 hours at $30	$360
H11	16 hours at $30	480

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	Jackson Consulting	Date	October 1
		Date wanted	October 10
		Date completed	October 10
		Job. No.
ESTIMATE

Direct Materials

Direct Labor

Summary

Amount

40 Meters at $34

$fill in the blank bb43e8043fdafd3_1

24 Hours at $30

$fill in the blank bb43e8043fdafd3_2

Direct Materials

$fill in the blank bb43e8043fdafd3_3

Direct Labor

fill in the blank bb43e8043fdafd3_4

Factory Overhead

fill in the blank bb43e8043fdafd3_5

Total

$fill in the blank bb43e8043fdafd3_6

Total

$fill in the blank bb43e8043fdafd3_7

Total cost

$fill in the blank bb43e8043fdafd3_8

ACTUAL

Direct Materials

Direct Labor

Summary

Mat. Req. No.

Description

Amount

Time Ticket No.

Description

Amount

Item

Amount

112

20 Meters at $34

$fill in the blank bb43e8043fdafd3_9

H10

12 Hours at $30

$fill in the blank bb43e8043fdafd3_10

Direct Materials

$fill in the blank bb43e8043fdafd3_11

Direct Labor

fill in the blank bb43e8043fdafd3_12

114

24 Meters at $34

fill in the blank bb43e8043fdafd3_13

H11

16 Hours at $30

fill in the blank bb43e8043fdafd3_14

Factory Overhead

fill in the blank bb43e8043fdafd3_15

Total

$fill in the blank bb43e8043fdafd3_16

Total

$fill in the blank bb43e8043fdafd3_17

Total Cost

$fill in the blank bb43e8043fdafd3_18

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 job were spoiled, the factory overhead rate has proven to be satisfactory, and an inexperienced employee performed the work.)

The direct materials cost exceeded the estimate by $136 because 4 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. The factory overhead cost exceeded the estimate because an additional $90 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.

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