Job Order Cost Sheet On September 6, the sofa and loveseat were picked up from t

Question

Job Order Cost Sheet

On September 6, the sofa and loveseat were picked up from the residence of John Jobs, 220 Apple Lane, Cupertino, CA, with a commitment to return it on October 31. The job was completed on October 28.

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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Solution

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.)

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.

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.
SelectabcdCorrect 1 of Item 2

JOB ORDER COST SHEET Customer John Jobs Date Sept. 3, 2014 Address 220 Apple Lane Date wanted Oct. 31, 2014 Cupertino, CA Date completed Oct. 28, 2014 Item Reupholster sofa and loveseat Job. No. ESTIMATE Direct Materials Direct Labor Summary Amount Amount Amount 40 meters at $25 30 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 508 18 Meters at $ 25 H40 14 Hours at $ 30 Direct Materials Direct Labor 510 25 Meters at $ 25 H43 20 Hours at $ 30 Factory Overhead Total Total Total Cost

Explanation / Answer

1 Estimate Direct materials Direct labor Summary Amount Amount 40 meters at $25 1000 30 hours at $30 900 Direct materials 1000 Direct labor 900 Factory overhead (900*60%) 540 Total 1000 Total 900 Total cost 2440 2 Actual Direct materials Direct labor Summary Mat.Req.No. Description Amount Time ticket No. Description Amount Item Amount 508 18 meters at $25 450 H40 14 hours at $30 420 Direct materials 1075 510 25 meters at $25 625 H43 20 hours at $30 600 Direct labor 1020 Factory overhead (10200*60%) 612 Total 1075 Total 1020 Total cost 2707

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