Question

Trina flower services customizes flower shops according to customers' orders. This month the company worked on five jobs, numbered 107 through 111. Materials requisitions for the month were as follows:

Ticket	Carpet	Paint	Electronics	Other	Total
107	$ 40	$350	$580	—	$  970
108	75	200	375	—	650
109	200	400	200	—	800
110	30	150	770	—	950
111	60	—	50	—	110
Indirect	—	—	—	$750	750
Total costs					$4,230

An analysis of the payroll records revealed the following distribution for labour costs:

Job	107	108	109	110	111	Other	Total
Direct labour	$1,400	$1,200	$800	$1,700	$400	—	$5,500
Indirect labour	—	—	—	—	—	$2,200	2,200
Total costs							$7,700

Other overhead costs (consisting of rent, amortization, taxes, insurance, utilities, etc.) amounted to $3,600. At the beginning of the period, management anticipated that overhead costs would be $6,400 and total direct labour would amount to $5,000. Overhead is allocated on the basis of direct labour dollars.

Jobs 107 through 110 were finished during the month; Job 111 is still in process. Jobs 107 through 109 were picked up and paid for by customers. Job 110 is still on the lot, waiting to be picked up.

A.  Calculate the total cost for each job for this month.

B.  Calculate the overapplied or underapplied overhead.

C.  Suppose that a customer who has just started a Flowering service wants to customize her shop but has a limited budget for the job. Estimated paint, electronics, and materials for containers to keep food cold or warm amounts to $1,700. Direct labour is estimated to be $1,100. The customer's budget is $3,000, but she is hoping that the delivery service will be successful so that she can order more items in the next several years. Calculate the minimum price that would be acceptable if there is ample capacity to accept the job.

Answer 1

Answer with working is given below: