Question 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 Plumbing system design $2635 System Installation 14250 Job-site cleanup 75 Costs During October Plumbing system design Supplies = 0 Engineering Labor = 250 System Installation = Materials = 2150 Direct labor = 6400 Job-site cleanup Janitorial = service cost 525 Required 1. Create the job order cost card for the Clary job. 2. What amount will Sanibel Plumbing Company bill for the Clary job? 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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