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 $3,850 to carpet the consulting firm’s newly leased office. The estimate was based on the following data:

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:

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.

What is the best explanation for the variances between actual costs and estimated costs. (For this purpose, assume that the additional meters of material used in the job were spoiled, the factory overhead rate has proven to be satisfactory, and an inexperienced employee performed the work.)

The direct materials cost exceeded the estimate by $128 because 4 meters of materials were spoiled. The direct labor cost exceeded the estimate by $120 because an additional 4 hours of labor were used by an inexperienced employee. The factory overhead cost exceeded the estimate because an additional $90 of factory overhead was allocated because of the increase in direct labor.

Management didn't provide enough direction to complete tasks on budget.

The direct materials cost exceeded the estimate by $75 because 3 meters of materials were spoiled.

The direct labor cost exceeded the estimate by $120 because an additional 4 hours of labor were used by an inexperienced employee.

Select the correct answer from the above choices.

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:

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:

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.

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.

E5-2 Determining Cost Behavior and Calculating Expected Cost [LO 5-1]

Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 0–1,700 units, and monthly production costs for the production of 1,200 units follow. Morning Dove’s utilities and maintenance costs are mixed with the fixed components shown in parentheses.   

Required:
1. Identify each cost as variable, fixed, or mixed, and express each cost as a rate per month or per unit (or combination thereof). (Round your per unit value to 2 decimal places.)



2. Determine the total fixed cost per month and the variable cost per unit for Morning Dove. (Round your variable cost per unit to 2 decimal places.)



3. State Morning Dove’s linear cost equation for a production level of 0–1,700 units. Enter answer as an equation in the form of y = a + bx. (Round your variable cost per unit to 2 decimal places.)



4. Calculate Morning Dove’s expected total cost if production increased to 1,400 units per month. Enter answer as an equation in the form of y = a + bx. (Round Variable cost per unit to 2 decimal places.)

Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows:

The activity bases identified for each activity are as follows:

The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows:

Each product requires 0.5 machine hour per unit.

P

Q 4 Abdulkarim Company is using job costing system. The allocation base for overhead is number of machine hours. The company uses normal costing to compute the overhead allocation rate.

The following data are available for 2017 year:

Estimated total overhead cost                                 $270,000

Estimated total number of machine-hours                 200,000

Actual total overhead cost                                       $290,000

Actual total number of machine-hours                      220,000

            Job 630 used 14, 000 machine hours.

            The company had job 630 and other jobs during the year.

a.   Calculate the estimated overhead allocation rate.

b.   Compute the overhead allocated to job 630.

c.   Calculate total allocated overhead and analyze the value of allocated overhead.

d.   Explain the Concept of Job Costing?

plz no photos

Q 4 Abdulkarim Company is using job costing system. The allocation base for overhead is number of machine hours. The company uses normal costing to compute the overhead allocation rate.

The following data are available for 2017 year:

Estimated total overhead cost   $270,000

Estimated total number of machine-hours   200,000

Actual total overhead cost    $290,000

Actual total number of machine-hours    220,000

   Job 630 used 14, 000 machine hours.

The company had job 630 and other jobs during the year.

a.   Calculate the estimated overhead allocation rate.

b.   Compute the overhead allocated to job 630.

c.   Calculate total allocated overhead and analyze the value of allocated overhead.

d. Explain the Concept of Job Costing?

Question 15
The short-run supply curve to a firm operating under perfect competition is most accurately described as the segment of the:
A. marginal cost (MC) curve above the average variable cost (AVC) curve.
B. marginal cost (MC) curve below the average total cost (ATC) curve.
C. average total cost (ATC) curve above the average variable cost (AVC) curve.
D. marginal cost (MC) curve.

question 17

Which of the following factors of production is least likely to be fixed in the short run?
A. Labour.
B. Plant size.
C. Technology.
D. Loans.

Question 21
Based on the concept of diminishing returns, as the quantity of output increases, the short-run marginal costs of production eventually:
A. rise at a decreasing rate.
B. rise at an increasing rate.
C. fall at a decreasing rate.
D. fall at an increasing rate

The cost in dollars of operating a jet-powered commercial airplane Co is given by the following equation
Co = k*n*v^(3/2)
where
n is the trip length in miles,
v is the velocity in miles per hour, and
k is a constant of proportionality.
It is known that at 590 miles per hour the cost of operation is $300 per mile. The cost of passengers' time in dollars equals $226,000 times the number of hours of travel. The airline company wants to minimize the total cost of a trip which is equal to the cost of operating plus the cost of passengers' time.
At what velocity should the trip be planned to minimize the total cost?
HINT: If you are finding this difficult to solve, arbitrarily choose a number of miles for the trip length, but as you solve it, you should be able to see that the optimal velocity does not depend on the value of n​

A firm operates in a perfectively competitive industry. Given the market price of 20 and the firm’s marginal cost function MC=-8+2Q. In addition, the average variable cost is equal to the marginal cost at 15 units of output. Use the information to answer questions 14 and 15.

1. Which of the following units of output would be chosen by the firm?

1. 10 units

2. 14 units

3. 22 units

4. 32 units

2. Should the firm continue its business and why?

1. Yes, because the market price is higher than the average variable cost at 15 units of output.

2. Yes, because the market price is lower than the average total cost at 15 units of output.

3. No, because the market price is lower than the average variable cost at 15 units of output.

4. No, because the market price is lower than the average total cost at 15 units of output.

A firm operates in a perfectively competitive industry. Given the market price of 20 and the firm’s marginal cost function MC=-8+2Q. In addition, the average variable cost is equal to the marginal cost at 15 units of output. Use the information to answer questions 14 and 15.

1. Which of the following units of output would be chosen by the firm?

1. 10 units
2. 14 units
3. 22 units
4. 32 units

2. Should the firm continue its business and why?

1. Yes, because the market price is higher than the average variable cost at 15 units of output.
2. Yes, because the market price is lower than the average total cost at 15 units of output.
3. No, because the market price is lower than the average variable cost at 15 units of output.
4. No, because the market price is lower than the average total cost at 15 units of output.