Question
Sparkling Pools Inc. provides pool cleaning services. Each service takes 3 hours. The company anticipates 1,500 services annually. They have invested $1,800,000 in their facilities
Sparkling Pools Inc. provides pool cleaning services. Each service takes 3 hours. The company anticipates 1,500 services annually. They have invested $1,800,000 in their facilities and expect an ROI of 20%. The budgeted costs for the coming year are shown below:
| Cost Item | Per Service ($) | Total ($) |
|---|---|---|
| Direct Materials (Chemicals) | 20 | 30,000 |
| Direct Labor (Technicians) | 60 | 90,000 |
| Variable Overhead | 15 | 22,500 |
| Fixed Overhead | - | 360,000 |
| Variable Selling & Admin Expenses | 10 | 15,000 |
| Fixed Selling & Admin Expenses | - | 72,000 |
Required:
- Determine the total cost per service.
- Calculate the desired ROI per service.
- Compute the target price per service.
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Cost Accounting A Managerial Emphasis
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
6th Canadian edition
978-0132893534, 9780133389401, 132893533, 133389405, 978-0133392883
