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Clean, Inc. cleans and waxes floors for commercial customers. The company is presently operating at less than capacity with e
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Answer #1
Correct option is: The company will lose $19,020 on the job
Workings:
Cost per square feet:
Direct Material = $       0.39
Add: Direct Labor = $       0.46
Add: Variable Manufacturing overhead = $       0.29
(i) Cost per square feet = $       1.14
(ii) Size of proposed job =      43,000
(i) X (ii) Total Cost = $ 49,020
Revenue = $ 30,000
Less: Total Cost = $ 49,020
Loss = $-19,020
The company will lose $19,020 on the job
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