Jackson Painting Co. paints the interiors of houses. During the year, they expect to paint...
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Jackson Painting Co. paints the interiors of houses. During the year, they expect to paint 10,000 square meters (m2 ) of space over 20 jobs at a cost of $548,000. Jackson does not have separate categories for Direct Labour and Direct Materials, and instead captures all costs in a single overhead pool. An examination of overhead costs revealed the following:
Labour: total costs $300,000
- 80% of the labour is spent painting, 15% is spent preparing each site, and 5% is spent on billing and customer relations.
Materials: total costs $248,000
A breakdown of materials costs is as follows:
- Paint and brushes: $210,000
- Plaster, tape, cleaners, and other site preparation materials: $20,000
- Other materials: $18,000 (split evening between painting and site preparation)
The industry standard is to quote jobs at Cost + 10%; meaning 10% profit is added to costs to calculate the total price to be quoted to customers.
How much does Jackson expect it to charge for a 2,000 m^2 job, assuming that all costs are allocated on the basis of m^2?
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