Reference no: EM133168371

Question - A company *Perry Co.* serving cleaning and garden maintenance services. Based on experience, this service company uses the formula to describe its total overhead costs as follows:

For cleanliness: Y= $150,000,000 + $500X,

For garden maintenance Y= $250,000 + $3000Z

Description: Y = Total overhead cost, and X: total floor area, Z: garden area

Overhead costs are assigned by dividing the total overhead by the number of cleaning operations. For any given cleaning, direct material costs range from $5,000 to $15,000 depending on the type of floor to be cleaned. The average is $10,000.

The average direct labor cost is $90,000 per job.

During 2018, the company received orders for cleaning services for 400 customers and garden maintenance services for 200 customers. Average price charged for each cleaning service is $300,000 and for garden maintenance $350,000. The company incurs annual sales expenses of $8,000,000 and administrative expenses of $7,000,000.

Required -

a. Does the company sell tangible or intangible products please explain?

b. Does the company use a management accounting system based on function or based on activities? tell. Is the system the right way? Tell.

c. What is the overhead cost of each job and Calculate the cost of the product per unit during the year?

d. Make a profit and loss report for a healthy home cleaning service company?