Question

1. Prepare a job cost sheet for a single family home under construction. List about five items that can be classified as direct materials and direct labor. Make a list of overhead costs of five items. Explain how you think overhead should be applied.

2. Contact a home builder and compare your job cost sheet to this builder's job cost sheet. If possible, speak to the company's accountant. Write your findings in a short report (about 1 page). If you do not like home builders, you can choose an architecture firm, consulting company, auditing firm, manufacturing company or any other company that uses job order costing.

Answer 1

1.) Project Name :- Sinlge Home 2208 City :-

Job Cost Sheet

Type of cost	Amount or Quantity	Price or Rate	Total Cost (Rounded)
Direct Material	10000 square feet	$12 per square foot	$1,20000
Direct Labour	1500 hours of labor	$15 per hour	$22500
Overheads	Refer Note # 1	-	$4500

Classification od direct marerial and direct labour -

Wood - Direct material

Steel - Direct material

Concrete - Direct material

Electrical fittings - Direct material

Workers - Direct labour

Subcontractors - Direct labour

Note # 1.) List of overhead Cost

Depreciation of equipment $1250

Building Rent $ 250

Property tax $500

Employees Salaries $1750

Other Utilities $750

TOTAL $4500

Overhead Cost don't directly relate to the job so this step is an approximation rather than a calculation. Many construction businesses work out the overhead by adding a % to each job. In this case we also divide the whole overhead expense on jobs.

2.) It is not practicle to solve by an expert, it is more of gathering information through direct communication from construction businesses.