Question

Suppose that back in the 1970s, Steve was asked to build speakers for two friends. The first friend, Jan, needed a speaker for her band. The second friend, Ed, needed a speaker built into the back of his hatchback automobile. Steve figured the following costs for each:

	Jan’s Job	Ed’s Job
Materials	$50	$75
Labor hours	10	20

Steve knew that Jan’s job would be easier, since he had experience in building the type of speaker she needed. Her job would not require any special equipment or specialized fitting. Ed’s job, on the other hand, required specialized design and precise fitting. Steve thought he might need to build a mock-up of the speaker first, to fit it into the space. In addition, he might have to add to his tool collection to complete the job. Normally, Steve figured a wage rate of $6 per hour and charged 20% of labor and materials as an overhead rate.

	Required:
1.	Prepare job-order cost sheets for the two jobs, showing total cost.
2.	CONCEPTUAL CONNECTION:  Which cost do you think is more likely to be accurate? How might Steve build in some of the uncertainty of Ed’s job into a budgeted cost?

1. Prepare job-order cost sheets for the two jobs, showing total cost. Refer to the list of Amount Descriptions for the exact wording of text items within your job-order cost sheets. All amount cells must have an entry; enter zeros as needed.

Job-Order Cost Sheets

1		Jan’s Job	Ed’s Job
2
3
4
5

Answer 1

Answey 01 page: 0 O prepage job - older cost sheet fou the two jobs, showing total cost jan's job Ed's job 50 132 234 Matewels 45 labour (1086) = 60 ( 90x6) = 120 orechend (20:1. X ( 50+60)) = 22 (vol. x(75+120])=39 Total @ Which cost do Я you theat is more likely to be accurate jan's job cost is more accurate Since he has experience in building the type of speaker she needed and therefore con accurately I think There are estinate the costs. How might stewe build on some of the uncertainty of Ed's gub in to a budgeted cost some uncerfrinities related to Ed's job due to which certains variables cannot be denived and therefore, there are higher chances of deviation between the actual cost and the budge- cted cost. steve can add more direct labour hours while calculating the total cost for Ed's job in order to build of the uncertainities of ed's job into a budgeted cost some