pleas help me ASAP Remnant Carpet Company sells and installs commercial carpetin
ID: 2580358 • Letter: P
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Remnant Carpet Company sells and installs commercial carpeting for office buildings. Remnant Carpet Company uses a A type of cost accounting system that provides for a separate record of the cost of each particular quantity of product that passes through the factory.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 An account in the work in process subsidiary ledger in which the costs charged to a particular job order are recorded.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 $2,436 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 The form or electronic transmission used by a manufacturing department to authorize materials issuances from the storeroom.materials requisitions and The form on which the amount of time spent by each employee and the labor cost incurred for each individual job, or for factory overhead, are recorded.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.)
a.)The direct materials cost exceeded the estimate by $120 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.
b.)Management didn't provide enough direction to complete tasks on budget.
c.)The direct materials cost exceeded the estimate by $75 because 3 meters of materials were spoiled.
d.) The direct labor cost exceeded the estimate by $120 because an additional 4 hours of labor were used by an inexperienced employee.
Estimated direct materials: 30 meters at $30 per meter $ 900 Estimated direct labor: 16 hours at $30 per hour 480 Estimated factory overhead (75% of direct labor cost) 360 Total estimated costs $1,740 Markup (40% of production costs) 696 Total estimate $2,436Explanation / Answer
Estimate
Actual
The best explanation for the variances between actual costs and estimated costs is:
d. The direct labor cost exceeded the estimate by $120 because an additional 4 hours of labor were used by an inexperienced employee.
Direct Materials Direct Labor Summary Amount Amount Amount 30 Mtrs at $30 $900 16 Hrs at $30 $480 Direct Materials $900 Direct labor 480 Factory Overhead 360 Total $900 $480 $1740Related Questions
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