Question:
(Cost control; writing) Juneau Container makes steel storage canisters for various chemical products. The company uses a job order costing system and obtains jobs based on competitive bidding. For each project, a budget is developed.
One of the firm's products is a 55-gallon drum. In the past year, the company made this drum on four separate occasions for four different customers. Financial details for the four orders follow:
|
Date
|
Job No.
|
Quantity
|
Bid Price
|
Budgeted Cost
|
Actual Cost
|
|
Jan. 17
|
2118
|
60,000
|
$190,000
|
$120,000
|
$145,000
|
|
Mar. 13
|
2789
|
29,000
|
155,000
|
110,000
|
121,000
|
|
Oct. 20
|
4300
|
61,000
|
180,000
|
125,000
|
143,000
|
|
Dec. 3
|
4990
|
35,000
|
175,000
|
150,000
|
168,000
|
Assume that you are the company's controller. Write a memo to management describing any problems that you perceive in the data presented and the steps that should be taken to eliminate recurrence of these problems.