Power Brite Painting Company specializes in refurbishing exterior painted surfac

Question

Power Brite Painting Company specializes in refurbishing exterior painted surfaces that have been hard hit by humidity and insect debris. It uses a special technique, called pressure cleaning, before priming and painting the surface. The refurbishing process involves the following steps:

Compute the average cost per job for the year. Round your answer to two decimal places.

Project the average cost per job for next year if variable costs per job increase 20 percent. Round your calculations and answer to two decimal points.

Power Brite Painting Company specializes in refurbishing exterior painted surfaces that have been hard hit by humidity and insect debris. It uses a special technique, called pressure cleaning, before priming and painting the surface. The refurbishing process involves the following steps:

1. Unskilled laborers trim all trees and bushes within two feet of the structure.
2. Skilled laborers clean the building with a high-pressure cleaning machine, using about 6 gallons of chlorine per job.
3. Unskilled laborers apply a coat of primer.
4. Skilled laborers apply oil-based exterior paint to the entire surface.

On average, skilled laborers work 12 hours per job, and unskilled laborers work 8 hours. The refurbishing process generated the following operating results during the year on 628 jobs:

Data on utilities for the year are as follows:

Compute the average cost per job for the year. Round your answer to two decimal places.

Project the average cost per job for next year if variable costs per job increase 20 percent. Round your calculations and answer to two decimal points.

Explanation / Answer

Average cost per job = 55420/628 = $88.25 Highest: August Highest: August: $5890 (1460 hours worked) Lowest: February: $3550 (740 hours worked) Variable rate = (5890 - 3550)/(1460 - 740) = $3.25 per hour worked Fixed Cost = 5890 - 1460 x 3.25 = $1145 We assume that the total hours worked remain constant next year. Total Annual cost = 1145x12 + 12560 x 3.25 x 1.2 = $62724 Average cost per job = 62724/628 = $99.88 Hope this helps!

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