Question: Dayton Publishers performs services on a job cost basis Most jobs

Dayton Publishers performs services on a job-cost basis. Most jobs take a week or less to complete. These typically involve at least two of Dayton’s five departments. Actual costs are accumulated by job, but the company prepares sales invoices based on cost estimates in order to assure timely billing.
Unfortunately, several recent jobs have resulted in losses and management has decided to refocus efforts on cost control at the departmental level. Dayton’s processes are highly labor intensive, so management has proposed the development of a departmental labor cost report. The report will originate in the payroll department as part of the biweekly payroll. From there it will go to an accounting clerk for comparison to total labor coast estimates by department. In the event that actual total departmental labor costs in payroll are not much more than the estimated total department labor cost during the period, the accounting clerk will send the report to the departmental foreman. On the other hand, significant variance differences require the accounting clerk to send the report to the assistant controller, who will investigate the cause (if time is available) and recommend corrective action to the production manager.

Discuss at the least three common aspects of control with which the departmental labor cost report proposal complies, giving examples from the case to support each.

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  • CreatedJanuary 21, 2015
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