Business, 01.03.2021 21:30 katielynfoot

Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year: Number of direct labor hours 6,720
Direct labor cost $67,200
Overhead cost $50,400

During the year, the following actual amounts were experienced:

Number of direct labor hours 6,045
Direct labor incurred $66,495
Overhead incurred $50,500

Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year: Number of direct labor hours 6,960 Direct labor cost $69,600 Overhead cost $49,416 During the year, the following actual amounts were experienced:

June July August
Number of systems installed 48 68 88
Direct materials used $11,520 $16,320 $21,120
Direct labor incurred $7,680 $10,880 $14,080
Overhead $6,912.00 $7,616.00 $8,448.00

Required:
a. Should Irrigation Specialties use process costing or job-order costing?
b. If Irrigation Specialties uses an actual costing system, what is the cost of a single system installed in June? In July?
c. Now assume that Irrigation Specialties uses a normal costing system. Estimated overhead for the year is $73,600, and estimated production is 640 watering systems. What is the predetermined overhead rate per system?

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