Question
Sparkle Window Cleaning provides window cleaning services. Each job takes approximately 2 hours. The company anticipates 1,800 jobs annually. They have invested $800,000 in their
Sparkle Window Cleaning provides window cleaning services. Each job takes approximately 2 hours. The company anticipates 1,800 jobs annually. They have invested $800,000 in their facilities and aim for an ROI of 20%. The budgeted costs for the coming year are shown below:
| Cost Item | Per Job ($) | Total ($) |
|---|---|---|
| Direct Materials (Cleaners, etc.) | 5 | 9,000 |
| Direct Labor (Cleaners) | 30 | 54,000 |
| Variable Overhead | 10 | 18,000 |
| Fixed Overhead | - | 160,000 |
| Variable Selling & Admin Expenses | 5 | 9,000 |
| Fixed Selling & Admin Expenses | - | 40,000 |
Required:
- Determine the total cost per job.
- Calculate the desired ROI per job.
- Compute the target price per job.
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
6th edition
978-0077400163
