Patterson Lawn Co. wants to determine the cost of each lawn care maintenance job. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows: Administrative Machine Maintenance Total cost $576,000 $3,825,000 The following estimates that are related to the operating departments is as follows: Commercial Residential Total properties properties # of employees 68 60 128 # of customers 225 260 485 # of billable hours 23,000 22,000 45,000 Total overhead cost* $ 525,000 $ 450,000 $ 975,000 *Note that total overhead cost includes costs allocated from service departments and other overhead costs. The Company uses the direct method for all cost allocations. Assume that total overhead cost is allocated based on the # of billable hours incurred by each operating department. Suppose a lawn care maintenance job in the residential properties department has a direct cost of $350 and takes 22 hours to complete. What is the total cost of this job?
Patterson Lawn Co. wants to determine the cost of each lawn care maintenance job. The Company has two operating departments, one that performs lawn care services for commercial properties and one that services residential properties. Both operating departments are supported by two service departments, administrative and machine maintenance. Costs for each of these supporting departments are as follows:
| Administrative | Machine Maintenance | ||
| Total cost | $576,000 | $3,825,000 | |
The following estimates that are related to the operating departments is as follows:
| Commercial | Residential | Total | ||||||||||
| properties | properties | |||||||||||
| # of employees | 68 | 60 | 128 | |||||||||
| # of customers | 225 | 260 | 485 | |||||||||
| # of billable hours | 23,000 | 22,000 | 45,000 | |||||||||
| Total |
$ | 525,000 | $ | 450,000 | $ | 975,000 | ||||||
*Note that total overhead cost includes costs allocated from service departments and other overhead costs.
The Company uses the direct method for all cost allocations. Assume that total overhead cost is allocated based on the # of billable hours incurred by each operating department. Suppose a lawn care maintenance job in the residential properties department has a direct cost of $350 and takes 22 hours to complete. What is the total cost of this job? (Round your intermediate calculations.)
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