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Job Order Cost Sheet Carlin Furniture Company refinishes and reupholsters furniture. Carlin Furniture uses a job...

Job Order Cost Sheet

Carlin Furniture Company refinishes and reupholsters furniture. Carlin Furniture 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 July 6, 2016, an estimate of $3,003 for reupholstering a sofa and loveseat was given to Justin Flannigan. The estimate was based on the following data:

Estimated direct materials:
30 meters at $35 per meter $ 1,050
Estimated direct labor:
24 hours at $30 per hour 720
Estimated factory overhead (75% of direct labor cost) 540
Total estimated costs $2,310
Markup (30% of production costs) 693
Total estimate $3,003

On July 10, the sofa and loveseat were picked up from the residence of Justin Flannigan, 310 Suzuki Drive, Lubbock, TX, with a commitment to return it on September 7. The job was completed on September 3.

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

Materials Requisition No. Description     Amount
310 15 meters at $35 $525
312 19 meters at $35 665
Time Ticket No. Description     Amount
H50 12 hours at $30 $360
H55 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 Justin Flannigan Date July 6, 2016
Address 310 Suzuki Drive Date wanted Sept. 7, 2016
Lubbock, TX Date completed Sept. 3, 2016
Item Reupholster Sofa and Loveseat Job. No.
ESTIMATE
Direct Materials Direct Labor Summary
Amount Amount Amount
30 Meters at $35 24 Hours at $30 Direct Materials
Direct Labor
Factory Overhead
Total Total Total cost
ACTUAL
Direct Materials Direct Labor Summary
Mat. Req. No. Description Amount Time Ticket No. Description Amount Item Amount
310 15 Meters at $35 H50 12 Hours at $30 Direct Materials
Direct Labor
312 19 Meters at $35 H55 16 Hours at $30 Factory Overhead
Total Total Total Cost

Feedback

1 & 2. Include the estimated and actual direct materials and direct labor. Include the estimated and applied factory overhead.

Learning Objective 2, Learning Objective 3.

What is the best explanation for the variances between actual costs and estimated costs. (For this purpose, assume that three meters of materials were spoiled, the factory overhead rate has been proved to be satisfactory, and an inexperienced employee performed the work.)

  1. The direct materials cost exceeded the estimate because materials were spoiled and the direct labor cost exceeded the estimate because additional hours of labor were used by an inexperienced employee.
  2. Management didn't provide enough direction to complete tasks on budget.
  3. The direct materials cost exceeded the estimate because materials were spoiled.
  4. The direct labor cost exceeded the estimate because additional hours of labor were used by an inexperienced employee.

Solutions

Expert Solution

ESTIMATED JOB COST SHEET
Customer: Justin Flannigan
Address: 310 Suzuki Drive,Lubbock,TX
Item: Reupholster Sofa and Loveseat
PARTICULARS AMOUNT($)
Direct Material 1050
Direct Labour Hr 720
Estimated Factory Overhead 540
Total Cost 2,310
Mark Up (30% of cost) 693
Estimated Selling Price 3003
ACTUAL JOB COST SHEET
Customer Justin Flannigan
Address: 310 Suzuki Drive,Lubbock,TX
Item: Reupholster Sofa and Loveseat
PARTICULARS AMOUNT($) AMOUNT($)
Direct Material
Material 310 (15Mts*$35) 525
Material 312 (19Mts*$35) 665 1190
Material
Direct Labour Hr
H50 (12Hrs*$30) 360
H55 (16Hrs*30) 480 840
Estimated Factory Overhead 540
Total Cost 2570
Markup(30% on cost) 771
Selling Price 3341
There was variance between estimated and actual cost because of the following reason:

The direct materials cost exceeded the estimate because materials were spoiled. The direct labour cost exceeded the estimate because additional hours of labour were used by an inexperienced employee

ekkarill92 answered 10 months ago
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