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Maintaining a clean working environment is important to Old Balance, an industrial parts manufacturer. Cleaning the plant is the responsibility of the maintenance department. The
Maintaining a clean working environment is important to Old Balance, an industrial parts manufacturer. Cleaning the plant is the responsibility of the maintenance department. The 80,000 square foot plant is thoroughly cleaned from four to eight times a month depending on the level and stage of production. For the most recent month, March, the plant was cleaned four times. The production schedule for the next quarter (April through June) indicates that the plant will need to be cleaned five, six, and eight times respectively. Two of the resources needed to clean the plant are labor and cleaning supplies. The cost driver for both resources is number of times the plant is cleaned. Plant cleaning laborers are full-time employees who are paid the same wages regardless of the number of times the plant is cleaned. Cleaning supplies is a variable cost. The March cost of labor was $21,000 and cleaning supplies used cost $9,600. Read the requirements. Requirement 1. Prepare a table that shows how labor cost, cleaning supplies cost, total cost, and total cost per cleaning changes in response to the number of times the plant is cleaned. What is the predicted total cost of plant cleaning for the next quarter? Begin by preparing a table that shows how labor cost, cleaning supplies cost, total cost, and total cost per cleaning changes in response to the number of times the plant is cleaned. (Do not round until the final answer for the cost per cleaning. Then round to the nearest whole dollar.) Number of Square Feet Cleaned Cleaning Supplies Total Times Plant is Cleaned Cost per Labor Cost Cost Cost Cleaning 4 5 6 7 8 1. Prepare a table that shows how labor cost, cleaning supplies cost, total cost, and total cost per cleaning changes in response to the number of times the plant is cleaned. What is the predicted total cost of plant cleaning for the next quarter? 2. Suppose Old Balance can hire an outside cleaning company to clean the plant as needed. The charge rate for cleaning is $5,300 per plant cleaning. If the outside cleaning company is hired, Old Balance can lay off the workers who are now cleaning the plant and will spend nothing for cleaning supplies. Will Old Balance save money with the outside cleaning company over the next quarter? Prepare a schedule that supports your
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