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Heidt Cleaning Services (HCS) is a local custodial service company serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business seems only marginally profitable. Twenty-five employees worked a total of 45,300 hours last year, 30,200 on commercial jobs and 15,100 on residential jobs. Wages were $20 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor-hours worked, which is also the basis for customer charges. Given current economic conditions and competition, HCS bills residential clients $40 per hour and commercial clients $30 per hour. Required: a. If overhead for the year was $404,580, what were the profits of the residential and commercial services using labor-hours as the allocation base? Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar. b. Overhead consists of costs of supervision, equipment used (including vehicle rental), and supplies used, which can be traced as follows: Activity Supervision Equipment depreciation and lease. Miscellaneous supplies Total overhead a. Revenue a. Direct Labor a. Overhead a. Profit b. Total Overhead L Draft Commercial Cost Driver Number of clients served Equipment hours Area serviced in square yards 604,000 269,720 Recalculate total overhead and profits for commercial and residential services based on these activity bases. Note: Round intermediate calculations to 2 decimal places. Residential Cost $ 47,460 188,000 169,120 $ 404,580 302,000 134,860 Cost Driver Volume Commercial 20 3,000 76,000 Residential 64 2,000 36,000

Heidt Cleaning Services (HCS) is a local custodial service company serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business seems only marginally profitable. Twenty-five employees worked a total of 45,300 hours last year, 30,200 on commercial jobs and 15,100 on residential jobs. Wages were $20 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor-hours worked, which is also the basis for customer charges. Given current economic conditions and competition, HCS bills residential clients $40 per hour and commercial clients $30 per hour. Required: a. If overhead for the year was $404,580, what were the profits of the residential and commercial services using labor-hours as the allocation base? Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar. b. Overhead consists of costs of supervision, equipment used (including vehicle rental), and supplies used, which can be traced as follows: Activity Supervision Equipment depreciation and lease. Miscellaneous supplies Total overhead a. Revenue a. Direct Labor a. Overhead a. Profit b. Total Overhead L Draft Commercial Cost Driver Number of clients served Equipment hours Area serviced in square yards 604,000 269,720 Recalculate total overhead and profits for commercial and residential services based on these activity bases. Note: Round intermediate calculations to 2 decimal places. Residential Cost $ 47,460 188,000 169,120 $ 404,580 302,000 134,860 Cost Driver Volume Commercial 20 3,000 76,000 Residential 64 2,000 36,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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M Question 2-Chapte ps//ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252F... A 09 Homework i k t nces Bw 1 here to search Activity Supervision Equipment depreciation and lease. Miscellaneous supplies AREBALLS Heidt Cleaning Services (HCS) is a local custodial service company serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business seems only marginally profitable. Twenty-five employees worked a total of 45,300 hours last year, 30,200 on commercial jobs and 15,100 on residential jobs. Wages were $20 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor-hours worked, which is also the basis for customer charges. Given current economic conditions and competition, HCS bills residential clients $40 per hour and commercial clients $30 per hour. Total overhead a. Revenue a. Direct Labor a. Overhead a. Profit b. Total Overhead Draft Required: a. If overhead for the year was $404,580, what were the profits of the residential and commercial services using labor-hours as the allocation base? Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar. b. Overhead consists of costs of supervision, equipment used (including vehicle rental), and supplies used, which can be traced as follows: Commercial 100 8: 604,000 269,720 McGraw Hill Connect Recalculate total overhead and profits for commercial and residential services based on these activity bases. Note: Round intermediate calculations to 2 decimal places. Piper Office DEPOT. Cost Driver Number of clients served Equipment hours Area serviced in square yards Residential 302,000 134,860 Saved < Prev C apapeten syrran 0 X 80007 ACG3343 202308 иа BAE heavy gauge jumbo Paper Clips 2 of 4 DELL I WORK HARD SO MY CAT CAN HAVI RETTER LIFE A X Cost $ 47,460 188,000 169,120 $ 404,580 Next > Help Cost Driver Volume Commercial 20 3,000 76,000 Residential 64 2,000 36,000 S DE
Transcribed Image Text:M Question 2-Chapte ps//ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation.com%252F... A 09 Homework i k t nces Bw 1 here to search Activity Supervision Equipment depreciation and lease. Miscellaneous supplies AREBALLS Heidt Cleaning Services (HCS) is a local custodial service company serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business seems only marginally profitable. Twenty-five employees worked a total of 45,300 hours last year, 30,200 on commercial jobs and 15,100 on residential jobs. Wages were $20 per hour for all work done. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor-hours worked, which is also the basis for customer charges. Given current economic conditions and competition, HCS bills residential clients $40 per hour and commercial clients $30 per hour. Total overhead a. Revenue a. Direct Labor a. Overhead a. Profit b. Total Overhead Draft Required: a. If overhead for the year was $404,580, what were the profits of the residential and commercial services using labor-hours as the allocation base? Note: Do not round intermediate calculations. Round final answers to the nearest whole dollar. b. Overhead consists of costs of supervision, equipment used (including vehicle rental), and supplies used, which can be traced as follows: Commercial 100 8: 604,000 269,720 McGraw Hill Connect Recalculate total overhead and profits for commercial and residential services based on these activity bases. Note: Round intermediate calculations to 2 decimal places. Piper Office DEPOT. Cost Driver Number of clients served Equipment hours Area serviced in square yards Residential 302,000 134,860 Saved < Prev C apapeten syrran 0 X 80007 ACG3343 202308 иа BAE heavy gauge jumbo Paper Clips 2 of 4 DELL I WORK HARD SO MY CAT CAN HAVI RETTER LIFE A X Cost $ 47,460 188,000 169,120 $ 404,580 Next > Help Cost Driver Volume Commercial 20 3,000 76,000 Residential 64 2,000 36,000 S DE
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