Job Order Cost Sheet
Carlin Furniture Company refinishes and reupholsters furniture.Carlin Furniture uses a job order cost system. When a prospectivecustomer asks for a price quote on a job, the estimated cost dataare inserted on an unnumbered job cost sheet. If the offer isaccepted, a number is assigned to the job, and the costs incurredare recorded in the usual manner on the job cost sheet. After thejob is completed, reasons for the variances between the estimatedand actual costs are noted on the sheet. The data are thenavailable to management in evaluating the efficiency of operationsand in preparing quotes on future jobs. On July 6, 2016, anestimate of $3,003 for reupholstering a sofa and loveseat was givento Justin Flannigan. The estimate was based on the followingdata:
| 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 theresidence of Justin Flannigan, 310 Suzuki Drive, Lubbock, TX, witha commitment to return it on September 7. The job was completed onSeptember 3.
The related materials requisitions and time tickets aresummarized 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 costsheet that would be prepared when the estimate is given to thecustomer.
2. Record the costs incurred, and complete thejob 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 anddirect labor. Include the estimated and applied factoryoverhead.
Learning Objective 2, Learning Objective 3.
What is the best explanation for the variances between actualcosts and estimated costs. (For this purpose, assume that threemeters of materials were spoiled, the factory overhead rate hasbeen proved to be satisfactory, and an inexperienced employeeperformed the work.)
- The direct materials cost exceeded the estimate becausematerials were spoiled and the direct labor cost exceeded theestimate because additional hours of labor were used by aninexperienced employee.
- Management didn't provide enough direction to complete tasks onbudget.
- The direct materials cost exceeded the estimate becausematerials were spoiled.
- The direct labor cost exceeded the estimate because additionalhours of labor were used by an inexperienced employee.
