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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.)

1. 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.
2. Management didn't provide enough direction to complete tasks onbudget.
3. The direct materials cost exceeded the estimate becausematerials were spoiled.
4. The direct labor cost exceeded the estimate because additionalhours of labor were used by an inexperienced employee.