Question 17 (of 22) | Save & Exit | | Submit Time remaining: 1:29:57 17 Gleam Cl

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Question 17 (of 22) | Save & Exit | | Submit Time remaining: 1:29:57 17 Gleam Clean cleans and waxes floors for commercial customers. The company is presently operating at less than capacity with eatipment and employees idle at. times. The company recently received an order from a potential customer outside the company's normal geographic service region for a price of $31,000. The size of the proposed job is 44,000 square feet. The company's normal service costs are as follows: Unit-level materials Unit-level labor Unit-level variable $0.40 per square foot $0.47 per square foot $0.30 per square foot overhead Facility-level overhead Allocated at $0.32 per square foot If the company accepts the special offer: O The company will lose $20,480 on the job. O The company will earn $13,400 on the job. O The company will lose $7.280 on the job. O The company will lose $34,560 on the job.

Explanation / Answer

Solution:

Materials= $0.40 x 44000 =$17600
Labor=$0.47 x 44000 = $20680

Overhead= $0.30 x 44000=$13200

Factory OH=$0.32 x 44000=$14080

Total costs=$65560

Job pays $9,000 Profit =

Pay-cost = $31000-$65560 = 34560

Therefore the company will: Lose $34560 on the job

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