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Jeff Boyer, of Rainking 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. Rainking estimated the following for the year:Number of installations 250Number of direct labor hours 5,000Direct materials cost $60,000Direct labor cost $75,000Overhead cost $65,000During the year, the following actual amounts were experienced:Number of installations 245Number of direct labor hours 5040Direct materials used $59,350Direct labor incurred $75,600Overhead incurred $64,1501. Should Rainking use the process costing or job-order costing? Explain2. If Rainking uses a normal costing system and overhead is applied on the basis of direct labor hours, what is the cost of an installation that takes $3,500 of direct material and 50 direct labor hours?3. Explain why Rainking would have difficulty using an actual costing system”
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