Costs of Services

Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.8 hours. On average, HHH completes about 18,000 cleanings per year. The following total costs are associated with the total cleanings:

Direct materials	$41,400
Direct labor	586,800
Variable overhead	21,600
Fixed overhead	25,200

Required:

If required, round your answers to the nearest cent.

1. Calculate the prime cost per cleaning. $per cleaning

2. Calculate the conversion cost per cleaning. $per cleaning

3. Calculate the total variable cost per cleaning. $per cleaning

4. Calculate the total service cost per cleaning. $per cleaning

5. What if rent on the office that Jean and Tom use to run HHH increased by $1,800? Which of the following statements best describes the effect of this on HHH's costs?