Job-Order Costing: Housing Sutton Construction Inc. is a privately held, family-founded corporation that builds single- and multiple-unit housing. Most projects Sutton Construction undertakes involve the construction of multiple units. Sutton Construction has adopted a job-order costing system for determining the cost of each unit. The costing system is fully computerized. Each project's costs are divided into the following five categories: General conditions, including construction site utilities, project insurance permits and licenses, architect's fees, decorating, field office salaries, and cleanup costs. Hard costs, such as subcontractors, direct materials, and direct labor. Finance costs, including title and recording fees, inspection fees, and taxes and discounts on mortgages. Land costs, which refer to the purchase price of the construction site. Marketing costs, such as advertising, sales commissions, and appraisal fees. Recently, Sutton Construction purchased land for the purpose of developing 20 new single-family houses. The cost of the land was $250,000. Lot sizes vary from ¼ to ½ acre. The 20 lots occupy a total of eight acres. General conditions costs for the project totaled $120,000. This $120,000 is common to all 20 units that were constructed on the building site. Job 3, the third house built in the project, occupied a ¼-acre lot and had the following hard costs: Direct materials $ 8,000 Direct labor 6,000 Subcontractor 14,000 For Job 3, finance costs totaled $4,765 and marketing costs, $800. General conditions costs are allocated on the basis of units produced. Each unit's selling price is determined by adding 40 percent to the total of all costs. Required: 1. Identify all production costs that are directly traceable to Job 3. If required, round your answers to the nearest dollar and use the same in your subsequent requirements. Land $ Direct Materials Direct labor Subcontractor $ 2. Develop a job-order cost sheet for Job 3. If required, round your answers to the nearest dollar. If an answer box does not require an entry, leave it blank. Job-Order Cost Sheet Job 3 MATERIALS DIRECT LABOR OVERHEAD Req. No. Amount Hrs. Rate Amount Hrs. Rate Amount Materials $ $ General $ Land Finance Subctr. Cost Summary Direct materials $ Direct labor Overhead Total cost $ 3. Calculate the selling price of Job 3. If required, round your answer to the nearest dollar. $ Calculate the profit made on the sale of this unit. If required, round your answer to the nearest dollar.

Job-Order Costing: Housing Sutton Construction Inc. is a privately held, family-founded corporation that builds single- and multiple-unit housing. Most projects Sutton Construction undertakes involve the construction of multiple units. Sutton Construction has adopted a job-order costing system for determining the cost of each unit. The costing system is fully computerized. Each project's costs are divided into the following five categories: General conditions, including construction site utilities, project insurance permits and licenses, architect's fees, decorating, field office salaries, and cleanup costs. Hard costs, such as subcontractors, direct materials, and direct labor. Finance costs, including title and recording fees, inspection fees, and taxes and discounts on mortgages. Land costs, which refer to the purchase price of the construction site. Marketing costs, such as advertising, sales commissions, and appraisal fees. Recently, Sutton Construction purchased land for the purpose of developing 20 new single-family houses. The cost of the land was $250,000. Lot sizes vary from ¼ to ½ acre. The 20 lots occupy a total of eight acres. General conditions costs for the project totaled $120,000. This $120,000 is common to all 20 units that were constructed on the building site. Job 3, the third house built in the project, occupied a ¼-acre lot and had the following hard costs: Direct materials $ 8,000 Direct labor 6,000 Subcontractor 14,000 For Job 3, finance costs totaled $4,765 and marketing costs, $800. General conditions costs are allocated on the basis of units produced. Each unit's selling price is determined by adding 40 percent to the total of all costs. Required: 1. Identify all production costs that are directly traceable to Job 3. If required, round your answers to the nearest dollar and use the same in your subsequent requirements. Land $ Direct Materials Direct labor Subcontractor $ 2. Develop a job-order cost sheet for Job 3. If required, round your answers to the nearest dollar. If an answer box does not require an entry, leave it blank. Job-Order Cost Sheet Job 3 MATERIALS DIRECT LABOR OVERHEAD Req. No. Amount Hrs. Rate Amount Hrs. Rate Amount Materials $ $ General $ Land Finance Subctr. Cost Summary Direct materials $ Direct labor Overhead Total cost $ 3. Calculate the selling price of Job 3. If required, round your answer to the nearest dollar. $ Calculate the profit made on the sale of this unit. If required, round your answer to the nearest dollar.

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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Job-Order Costing: Housing

Sutton Construction Inc. is a privately held, family-founded corporation that builds single- and multiple-unit housing. Most projects Sutton Construction undertakes involve the construction of multiple units. Sutton Construction has adopted a job-order costing system for determining the cost of each unit. The costing system is fully computerized. Each project's costs are divided into the following five categories:

General conditions, including construction site utilities, project insurance permits and licenses, architect's fees, decorating, field office salaries, and cleanup costs.
Hard costs, such as subcontractors, direct materials, and direct labor.
Finance costs, including title and recording fees, inspection fees, and taxes and discounts on mortgages.
Land costs, which refer to the purchase price of the construction site.
Marketing costs, such as advertising, sales commissions, and appraisal fees.

Recently, Sutton Construction purchased land for the purpose of developing 20 new single-family houses. The cost of the land was $250,000. Lot sizes vary from ¼ to ½ acre. The 20 lots occupy a total of eight acres.

General conditions costs for the project totaled $120,000. This $120,000 is common to all 20 units that were constructed on the building site.

Job 3, the third house built in the project, occupied a ¼-acre lot and had the following hard costs:

Direct materials	$ 8,000
Direct labor	6,000
Subcontractor	14,000

For Job 3, finance costs totaled $4,765 and marketing costs, $800. General conditions costs are allocated on the basis of units produced. Each unit's selling price is determined by adding 40 percent to the total of all costs.

Required:

1. Identify all production costs that are directly traceable to Job 3. If required, round your answers to the nearest dollar and use the same in your subsequent requirements.

Land	$
Direct Materials
Direct labor
Subcontractor
	$

2. Develop a job-order cost sheet for Job 3. If required, round your answers to the nearest dollar. If an answer box does not require an entry, leave it blank.

Job-Order Cost Sheet
Job 3
MATERIALS	DIRECT LABOR	OVERHEAD
Req. No.	Amount	Hrs.	Rate	Amount	Hrs.	Rate	Amount
Materials	$			$	General		$
Land					Finance
			Subctr.
			Cost Summary
			Direct materials	$
			Direct labor
			Overhead
			Total cost	$

3. Calculate the selling price of Job 3. If required, round your answer to the nearest dollar.
$

Calculate the profit made on the sale of this unit. If required, round your answer to the nearest dollar.
$

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