FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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**P9-1: Job Cost Sheet for a Service Business**

**LO1**

Bailey and Tepe, attorneys-at-law, provided legal representation to Goode 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 Goode contracted with Bailey and Tepe was May 8, 2016, and the defense was successfully completed on December 21, 2016. The engagement number is 525.

**REQUIRED:**

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

---

**P9-2: Cost Performance Report and Budgeted Profit and Actual Profit for a Service Business**

**LO1**

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

| Expense Type                         | Amount  |
|--------------------------------------|---------|
| Partners' salary and overhead        | $6,300  |
| Associates' salary and overhead      | $9,175  |
| Travel                               | $4,160  |
| 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.
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Transcribed Image Text:**P9-1: Job Cost Sheet for a Service Business** **LO1** Bailey and Tepe, attorneys-at-law, provided legal representation to Goode 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 Goode contracted with Bailey and Tepe was May 8, 2016, and the defense was successfully completed on December 21, 2016. The engagement number is 525. **REQUIRED:** Prepare a job order cost sheet, in good form, for Goode Equipment Inc. --- **P9-2: Cost Performance Report and Budgeted Profit and Actual Profit for a Service Business** **LO1** The budget for the Goode Equipment Inc. job in P9-1 consisted of the following amounts: | Expense Type | Amount | |--------------------------------------|---------| | Partners' salary and overhead | $6,300 | | Associates' salary and overhead | $9,175 | | Travel | $4,160 | | 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.
**Problem 9-2**

**1. Cost Performance Report**

|                           | Actual Result | Budget | Variance |
|---------------------------|---------------|--------|----------|
| Partners' salary and overhead |               |        |          |
| Associates' salary and overhead |               |        |          |
| Travel                    |               |        |          |
| Telephone/fax/copying     |               |        |          |
| **Total**                 |               |        |          |

**2. Financial Summary**

- **Bid price**
- **Budgeted costs**
- **Budgeted profit**

- **Bid price**
- **Actual costs**
- **Actual profit** 

**Explanation:**

- The **Cost Performance Report** is a table designed to track and compare budgeted costs against actual results for various expenses, with categories including salaries, travel, and communication costs like telephone, fax, and copying. There is a section for variance to show how much the actual costs differ from the budgeted amounts.

- The second section presents a **Financial Summary**, comparing bid price, costs, and profits for both budgeted and actual figures. This is useful for analyzing financial performance against projections.
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Transcribed Image Text:**Problem 9-2** **1. Cost Performance Report** | | Actual Result | Budget | Variance | |---------------------------|---------------|--------|----------| | Partners' salary and overhead | | | | | Associates' salary and overhead | | | | | Travel | | | | | Telephone/fax/copying | | | | | **Total** | | | | **2. Financial Summary** - **Bid price** - **Budgeted costs** - **Budgeted profit** - **Bid price** - **Actual costs** - **Actual profit** **Explanation:** - The **Cost Performance Report** is a table designed to track and compare budgeted costs against actual results for various expenses, with categories including salaries, travel, and communication costs like telephone, fax, and copying. There is a section for variance to show how much the actual costs differ from the budgeted amounts. - The second section presents a **Financial Summary**, comparing bid price, costs, and profits for both budgeted and actual figures. This is useful for analyzing financial performance against projections.
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