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	$52,200
Direct labor	511,200
Variable overhead	19,800
Fixed overhead	23,400

Required:

If required, round your answers to the nearest cent.

1. Calculate the prime cost per cleaning. $fill in the blank 1per cleaning

2. Calculate the conversion cost per cleaning. $fill in the blank 2per cleaning

3. Calculate the total variable cost per cleaning. $fill in the blank 3per cleaning

4. Calculate the total service cost per cleaning. $fill in the blank 4per 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?

Prime costs would increaseConversion costs per cleaning would increaseTotal service costs per cleaning would decreaseTotal variable costs would decrease