Cost performance report and budgeted profit and actual profit for a service business Th...

Cost performance report and budgeted profit and actual profit for a service business

The budget for the Murphy Equipment Inc. job in P9-1 consisted of the following amounts:

Partners’ salary and overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,300

Associates’ salary and overhead. . . . . . . . . . . . . . . . . . . . . . . . . . . 9,175

Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,150

Telephone/fax/copying . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,475

The successful bid price of the job was $30,000.

Required:

1. Prepare a cost performance report.

2. Compute the budgeted profit and the actual profit on the job.

Reference:

Job cost sheet for a service business

Freeman and Lueke, attorneys-at-law, provided legal representation to Murphy Equipment Inc. in a product liability suit. Twenty partner hours and 65 associate hours were worked in defending the company. The cost of each partner hour is $325, which includes partner wages plus overhead, based on direct labor cost. The cost of each associate hour is $145, which also includes wages and overhead. Other costs that can be directly identified with the job are travel ($2,800) and telephone/fax/copying charges ($1,740). The date Murphy contracted with Freeman and Lueke was May 8, 2013, and the defense was successfully completed on December 21, 2013. The engagement number is 525.

Required:

Prepare a job order cost sheet, in good form, for Murphy Equipment Inc.