Your company, Day-Glo Painting, has just finished its first year of operation. During the first year of operation, you painted the exterior of 20 houses in pink with purple trim. Although the first few homeowners were unsure about the colors and threatened to sue the company, the pink and purple houses are now becoming a fad and are quite popular. The profit and loss statement for the company during the first year is:

The direct labor of painting and cost of paint vary with the square meters of surface area painted. During the year, the company painted 400,000 square meters of surface. In addition, direct labor, but no significant paint, is used to paint the trim around doors and windows. Painting trim takes an hour per 20 meters of trim. During the first year, the company painted 40,000 meters of trim.
The second year is just beginning. The time and cost of labor, cost of paint per liter, and the cost of rental and general administration are expected to be the same in the second year. Day-Glo Painting is bidding to paint a house that has 25,000 square meters of surface area and 3,000 meters of trim.

a. What is the cost of paint per square meter of surface?

b. What is the cost of direct labor per meter of trim?

c. What is the cost of direct labor per square meter of surface?

d. What is the rental and administration cost of painting the house?

e. What is the total cost of painting the house?

Transcribed Image Text:

Day-Glo Painting Profit and Loss Statement First Year Revenues Direct labor ($20/hour) Paint Rental of painting equipment General administration Profit $120,000 (75,000) (20,000) (5,000) (10,000) $ 10,000