Question: 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 Direct labor $44,100 705,600 Variable overhead 21,000 Fixed overhead 25,200 Required: 1. Calculate the prime cost per cleaning. 2. Calculate the conversion cost per cleaning. 3. Calculate the total variable cost per cleaning. 4. Calculate the total service cost per cleaning.

Question: 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 Direct labor $44,100 705,600 Variable overhead 21,000 Fixed overhead 25,200 Required: 1. Calculate the prime cost per cleaning. 2. Calculate the conversion cost per cleaning. 3. Calculate the total variable cost per cleaning. 4. Calculate the total service cost per cleaning.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 5CE: Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each...

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Current Attempt in Progress Splish College provides its own housekeeping services. The College director would like to outsource this service and has found a company that will provide the service for $49 per hour. The following information has been collected about the cost per hour to the college for performing its own housekeeping services Cost per hour of service: Cleaning supplies $3 Direct labour costs $27 Variable overhead $1 Total hours of housekeeping services per year 3,040 Total fixed overhead $55,080 (a) Your answer is partially correct Determine whether Splish College should outsource housekeeping, assuming that 50% of fixed costs can be eliminated if the service is outsourced. (If an amount reduces the net income then enter with a negative sign preceding the number, eg-15,000 or parenthesis, eg (15,000). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) amber of hours: 040 In-house eaning supplies…
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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 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Required: 1. Calculate the prime cost per cleaning. 2. Calculate the conversion cost per cleaning. 3. Calculate the total variable cost per cleaning. 4. Calculate the total service cost per cleaning. 5. What if rent on the office that Jean and Tom use to run HHH increased by 1,500? Explain the impact on the following: a. Prime cost per cleaning b. Conversion cost per cleaning c. Total variable cost per cleaning d. Total service cost per cleaning