HyStandard Services, Inc. provides residential painting services for three home buildingcompanies, Alpine, Blue Ridge, and Pineola, and it uses a job costing system for determiningthe costs for completing each job. The job cost system does not capture any cost incurred byHyStandard for return touchups and refinishes after the homeowner occupies the home.HyStandard paints each house on a square footage contract price, which includes painting aswell as all refinishes, and touchups required after the homes are occupied. Each year, thecompany generates about one-third of its total revenues and gross profits from each of the threebuilders. The HyStandard owner has observed that the builders, however, require substantiallydifferent levels of support following the completion of jobs. The following data have beengathered:Support ActivityMajor refinishesTouchups.....CommunicationBuilderAlpine....Blue Ridge..Pineola...MajorRefinishes803542DriverHours on jobsNumber of visitsNumber of callsCost per Driver Unit$60$100$40Touchups150110115Communication360205190935727RequiredAssuming that each of the three customers produces gross profits of $100,000, calculate theprofitability from each builder after taking into account the support activity required for eachbuilder.

Support Activity Major refinishes Touchups... Communication Builder Alpine... Blue Ridge .. Pineola... .... .... Major Refinishes .. 80 35 42 Driver Hours on jobs Cost per Driver Unit $60 $100 $40 Number of visits Number of calls Touchups 150 110 115 Communication 360 205 190 Required Assuming that each of the three customers produces gross profits of $100,000, calculate the profitability from each builder after taking into account the support activity required for each

Support Activity Major refinishes Touchups... Communication Builder Alpine... Blue Ridge .. Pineola... .... .... Major Refinishes .. 80 35 42 Driver Hours on jobs Cost per Driver Unit $60 $100 $40 Number of visits Number of calls Touchups 150 110 115 Communication 360 205 190 Required Assuming that each of the three customers produces gross profits of $100,000, calculate the profitability from each builder after taking into account the support activity required for each

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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