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 $2,464 to carpet the consulting firm’s newly leased office. The estimate was based on the following data: Estimated direct materials: 40 meters at $30 per meter $ 1,200 Estimated direct labor: 16 hours at $20 per hour 320 Estimated factory overhead (75% of direct labor cost) 240 Total estimated costs $1,760 Markup (40% of production costs) 704 Total estimate $2,464 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 $30 $600 114 24 meters at $30 720 Time Ticket No. Description Amount H10 8 hours at $20 $160 H11 12 hours at $20 240 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.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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
| Estimated direct materials: | |
| 40 meters at $30 per meter | $ 1,200 |
| Estimated direct labor: | |
| 16 hours at $20 per hour | 320 |
| Estimated factory |
240 |
| Total estimated costs | $1,760 |
| Markup (40% of production costs) | 704 |
| Total estimate | $2,464 |
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 $30 | $600 | |
| 114 | 24 meters at $30 | 720 |
| Time Ticket No. | Description | Amount | |
| H10 | 8 hours at $20 | $160 | |
| H11 | 12 hours at $20 | 240 |
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.
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