Reference no: EM133043106

Question - While the Dallas Cowboys have won five Super Bowls, many football fans recognize the team for its futuristic home, AT&T Stadium in Arlington, Texas. The 80,000-seat stadium, built in 3 years, features two arches spanning a quarter-mile in length over the dome, a retractable roof, the largest retractable glass doors in the world (in each end zone), canted glass exterior walls, and a 600-ton video screen. To manage costs and make a profit, Manhattan Construction estimated and then evaluated the cost of building each feature.

The AT&T Stadium project had five stages: (1) conceptualization, (2) design and planning, (3) preconstruction, (4) construction, and (5) finalization and delivery. At each stage, the job-costing system tracked actual costs of direct materials, direct labor, and overhead costs (supervisor salaries, rent, materials handling, and so on). These costs were compared to budgeted costs to evaluate how well materials, labor and overhead resources were used. Without disciplined job costing, managing costs on this complex project would be extremely difficult. Job costing was key to Manhattan Construction turning a profit on AT&T Stadium.

Discuss job order costing system. Be sure to address the following:

-Briefly explain job order costing.

-What are the characteristics of the companies that would use job order costing?

-Describe normal costing vs. actual costing.

-What characteristics of AT&T Stadium made the construction project a good candidate for job order costing?