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Exercise 9-43 (Algo) Activity-Based Costing in a Service Environment ( LO 9-3, 4, 5) Heidt Cleaning Services (HCS) is a local custodial service compary serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business seems only marginally prostable. Twenty-five employees worked a total of 44,100 hours last year, 29,400 on commereial jobs and 14,700 on residentiel jobs. Wages were $20 per hour for all work doge. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor hours worked, which is aiso the basis for customer charges Given current economic conditions and competition, HCS bills residential clients $40 per hour and commerelal clients $30 per hour, Required: a. If overhead for the year was $394,260, what were the profis of the residential and commercial services using labor-bours as the aliocation base? Note: Do not round intermediate calculations. Round final answers to the nearest whole oftiac. b. Overhead consists of costs of supervision, equipment used finctuding vehicle rentaf, and supplies used, which can be traced as fotlows: Recalculate total overheed and profits for commercial and residehtial sorvices based on these actity bases Note: Round intermediste calculations to 2 decimat places. Exercise 9-43 (Algo) Activity-Based Costing in a Service Environment ( LO 9-3, 4, 5) Heidt Cleaning Services (HCS) is a local custodial service compary serving both the residential and commercial markets. The owner is considering dropping the commercial clients because that business seems only marginally prostable. Twenty-five employees worked a total of 44,100 hours last year, 29,400 on commereial jobs and 14,700 on residentiel jobs. Wages were $20 per hour for all work doge. Any materials used are included in overhead as supplies. All overhead is allocated on the basis of labor hours worked, which is aiso the basis for customer charges Given current economic conditions and competition, HCS bills residential clients $40 per hour and commerelal clients $30 per hour, Required: a. If overhead for the year was $394,260, what were the profis of the residential and commercial services using labor-bours as the aliocation base? Note: Do not round intermediate calculations. Round final answers to the nearest whole oftiac. b. Overhead consists of costs of supervision, equipment used finctuding vehicle rentaf, and supplies used, which can be traced as fotlows: Recalculate total overheed and profits for commercial and residehtial sorvices based on these actity bases Note: Round intermediste calculations to 2 decimat places

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