Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 2.1 hours. On average, HHH completes about 21,000 cleanings per year. The following total costs are associated with the total cleanings: Direct materials $39,900 Direct labor 655,200 Variable overhead 21,000 Fixed overhead 25,200 Required: If required, round your answers to the nearest cent. 1. Calculate the prime cost per cleaning. $fill in the blank 1per cleaning 2. Calculate the conversion cost per cleaning. $fill in the blank 2per cleaning 3. Calculate the total variable
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 2.1 hours. On average, HHH completes about 21,000 cleanings per year. The following total costs are associated with the total cleanings:
| Direct materials | $39,900 |
| Direct labor | 655,200 |
| Variable |
21,000 |
| Fixed overhead | 25,200 |
Required:
If required, round your answers to the nearest cent.
1. Calculate the prime cost per cleaning.
$fill in the blank 1per cleaning
2. Calculate the conversion cost per cleaning.
$fill in the blank 2per cleaning
3. Calculate the total variable cost per cleaning.
$fill in the blank 3per cleaning
4. Calculate the total service cost per cleaning.
$fill in the blank 4per cleaning
5. What if rent on the office that Jean and Tom use to run HHH increased by $2,100? Which of the following statements best describes the effect of this on HHH's costs?
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