Janice Huffman has decided to start Fanning Cleaning, a residential housecleanin

Question

Janice Huffman has decided to start Fanning Cleaning, a residential housecleaning service company. She is able to rent cleaning equipment at a cost of $790 per month. Labor costs are expected to be $55 per house cleaned and supplies are expected to cost $9 per house.

Required

Determine the total expected cost of equipment rental and the average expected cost of equipment rental per house cleaned, assuming that Fanning Cleaning cleans 10, 20, or 30 houses during one month. Is the cost of equipment a fixed or a variable cost?

Determine the total expected cost of labor and the average expected cost of labor per house cleaned, assuming that Fanning Cleaning cleans 10, 20, or 30 houses during one month. Is the cost of labor a fixed or a variable cost?

Determine the total expected cost of supplies and the average expected cost of supplies per house cleaned, assuming that Fanning Cleaning cleans 10, 20, or 30 houses during one month. Is the cost of supplies a fixed or a variable cost?

Determine the total expected cost of cleaning houses, assuming that Fanning Cleaning cleans 10, 20, or 30 houses during one month.

Determine the average expected cost per house, assuming that Fanning Cleaning cleans 10, 20, or 30 houses during one month.

Explanation / Answer

Cost Type Unit Value Renting cleaning equipment $ per month 790 Labor cost $ per house 55 Supplies Cost $ per house 9 Renting cleaning equipment Labor cost Supplies Cost Total Cost Average Cost Nos. of house cleaned Total cost Avg. cost Total cost Avg. cost Total cost Avg. cost 10 790 79.00 550 55 90 9 1430 143.0 20 790 39.50 1100 55 180 9 2070 103.5 30 790 26.33 1650 55 270 9 2710 90.3 Cost of equipment is fixed cost Cost of labor is variable cost Cost of supplies is variable cost

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