Reference no: EM13481573
Power Brite Painting Company specializes in refurbishing exterior painted surfaces that have been hard hit by humidity and insect debris. It uses a special technique, called pressure cleaning, before priming and painting the surface. The refurbishing process involves the following steps:
- Unskilled laborers trim all trees and bushes within two feet of the structure.
- Skilled laborers clean the building with a high-pressure cleaning machine, using about 6 gallons of chlorine per job.
- Unskilled laborers apply a coat of primer.
- Skilled laborers apply oil-based exterior paint to the entire surface.
On average, skilled laborers work 12 hours per job, and unskilled laborers work 8 hours. The refurbishing process generated the following operating results during the year on 628 jobs:
Data on utilities for the year are as follows:
Required:
1. Classify the costs as variable, fixed, or mixed.
Skilled labor
Unskilled labor
Chlorine
Paint primer
Paint
Depreciation, paint-spraying equipment
Lease payments on vans
Rent on storage building
Utilities
2. Using the high-low method, separate mixed costs into their variable and fixed components. Use total hours worked as the basis. Round your answers to two decimal places.
Variable rate $ per hour worked
Monthly Fixed Cost $
3. Compute the average cost per job for the year. Round your answer to two decimal places. (Hint: Divide the total of all costs for the year by the number of jobs completed.)
$ per job
4. Project the average cost per job for next year if variable costs per job increase 20 percent. Round your answer to two decimal places.
$