a change in problem 1, paint primmer needs to be 45 $ per gallon and paint 65$ per gallon
Chapter 21 Problem 1P Done Cost Behavior and Projection for a Service Business Wabash 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: 1. Unskilled laborers trim all trees and bushes within two feet of the structure. 2. Skilled laborers clean the building with a high- pressure cleaning machine, using about 6 gallons of chlorine per job. 3. Unskilled laborers apply a coat of primer. 4. 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 500 jobs: Skilled Labor $20 per hour Unskilled bor 5 per hour Gallons of chlorinewed 1000 gallona 5.50 Paint primer 7536 gallons S155 pergation Paint C200 gallons 16.00 per gallon Depreciation of paint spraying equipment $600 per month deprecation Lease of two vans 5800 per month total Renton storage building Data on utilities for the year follow: Month Number of Jobs Cost Hours World January 52.950 February 2550 March 44 April May 4720 1.000 June 5.200 12 Aly 5.000 August 50 September 20 October November 4210 December 20 Total $55.400 12.50 REQUIRED 1. Classify the costs as variable, fixed, or mixed. 2. Using the high-low method, separate mixed costs into their variable and fixed components. Use total hours worked as the basis 3. Compute the average cost per job for the year. 4. Project the average cost per job for next year it variable costs per job increase 20 percent. (Round to two decimal places.) 5. Why can actual utilities costs vary from the amount computed using the utilities cost formula