Progressive Painting Company (PPC) is a successful company in commercial and residential painting. PPC has a variety of jobs: new construction, repair and repainting existing structures and restoration of very old buildings and homes. The company is known for the quality and reliability of its work, and customers expect to pay a little more for those benefits. One of the company’s core values us sustainability, and it insists on using the most environmentally friendly paints and materials in its work: it has refused jobs where the client required a more environmentally harmful paint than PPC thought was appropriate for the application. The company’s commitment to sustainability has lost PPC some jobs, but it has also attracted a loyal and growing customer base,
The company uses job costing and applies overhead on the basis of direct labor hours. Overhead for the company consists of painting equipment, trucks, supervisory labor, supplies and administrative operation costs. The total budgeted cost for the year are shown below.
Direct Materials $3,020,000
Direct Labor Hours 37,500
Direct Labor Dollars $810,000
Gallons of paint 32,000
Total Overhead $403,125
Prevette
Direct Materials $5,000
Gallons of paint - 18
Direct Labor Hours - 30
Direct Labor Cost - $915
Harmon
Direct Materials $5,800
Gallons of paint - 32
Direct Labor Hours - 54
Direct Labor Cost - $1,510
Determine the total cost of each job.
Prevette =
Harmon =