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4 - A local cleaning service has identified 4 activities that drive its costs. The service uses activity-based costing to estimate the costs of jobs
4 - A local cleaning service has identified 4 activities that drive its costs. The service uses activity-based costing to estimate the costs of jobs prior to pricing them. They clean both commercial and residential properties. They have the following budgets for the upcoming year: Cost Type Driver Budgeted Cost for Both Commercial Expected Driver Activity for Commercial Properties Expected Driver Activity for Residential Properties & Residential Properties Cleaning Personnel $120,000 600 # of Properties to Clean properties to clean 900 properties to clean Travel to Jobs $30,000 Miles Driven | 30,000 miles | 10,000 miles to/from (round-trip) | (round-trip) Property Cleaning Equipment $40,000 24,000 hours 16,000 hours Hours to Clean a Property Cleaning Supplies | $60,000 Square Feet of Property 360,000 square feet 240,000 square feet A residential customer has called and would like price quote to have his property cleaned next week. The property is a 20 mile round-trip to/from the cleaning personnel. It should take about 4 hours to clean it and the house is 1,000 square feet. What would you recommend the price quote be to this customer? Support your answer with clear calculations of your cost estimate and 25 words or less about your pricing strategy
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