Required 1. identify all production costs that are directly traceable to Job 3. Are all remaining production costs equivalent to overhead found in a manufacturing firm? Are there nonproduction costs that are directly traceable to housing unit? Which ones? 2. Develop a job - order cost sheet for Job 3. What is the cost of building this house ? Did you include finance and marketing costs in computing the unit cost? Why or why not ? How did you determine the costs of land for Job 3?
Sutton Construction Inc is a privately held, family founded corporation on 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 following five categories:
1. General conditions, including construction site utilities, project insurance permits and licenses, architect fees, decorating, field office salaries, and clean up costs
2. Hard costs, such as subcontractors, direct materials and direct labor
3. Finance costs, including title and recording fees, inspection fees, and taxes and discounts on mortgages
4. Land costs, which refer to the purchases price of the construction site
5. Marketing costs, such as advertising, sales commisions, and appraisal fees
Recently, sutton corporation purchased land for the purposes of developing 20 new single family house. The cost of the land was $25.000. Lot sizes vary from 1/4 to 1/2 acre. The 20 lots occupy a total of eight acres.
General conditions costs for the projected totaled $120.000 is common to all 20 units that were constructed on building site.
Job 3, the third house built in the project, occupied a 1/4 acre lot had the following hard costs:
Direct materials $8.000
Direct labor $6000
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% to total of all costs
Required
1. identify all production costs that are directly traceable to Job 3. Are all remaining production costs equivalent to
2. Develop a
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