Sanibel Plumbing Company_job order costing



Sanibel Plumbing Company employs 30 people and serves the Fort Myers
area, It earns roughly half its revenue from installing plumbing in newly
constructed houses and half from plumbing repairs and remodeling jobs in older
houses. It uses job order cost cards to keep track of the costs incurred on
each job. Job costs (direct materials and supplies, direct labor, and service
overhead) are categorized under three activities: plumbing system design,
system installation, and job-site cleanup. The service overhead charge for
plumbing system design is 30 percent of engineering labor costs, and the
overhead charge for system installation is 50 percent of direct labor costs.

Sanibel has tracked all costs of the
Clary job, and now that the work is finished, it is time to complete the job
order costs card. Its costs-plus contract with Clary has a 25 percent profit
guarantee. The costs for the job areas follows:

Beginning Balances

system design $2,635

System Installation


Costs During October

Plumbing system design

Supplies = 0

Labor = 250

System Installation =

Materials = 2150

labor = 6400

Job-site cleanup

Janitorial =
service cost 525


1. Create the job order cost card for the Clary job.

2. What amount will Sanibel Plumbing Company bill for the Clary

3. Using the format of the Work in Process Inventory account,
reconstruct the beginning balance and costs
for the current month.


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