Free and Easy, a local window-cleaning operation, has been having trouble maintaining its profitability. The company president, June Williams, has asked you to come in and help her identify why she is missing her profit goals. She plans for labor to be 50% of the job’s cost, supplies 15%, and “overhead” (the ladders, and so forth) at 5%, leaving her with a 20% profit per job. She gives you the following information on her six representative jobs:

REQUIRED:

a. Calculate the percentage of labor cost for each job.

b. Calculate the percentage of supply costs for each job.

c. Calculate the percentage of actual overhead for each job.

d. Calculate the profit per job (revenue minus costs) in dollar terms and as a percent of the total revenue.

e. What does this information tell you?

f. What would you recommend to June? Is her answer in changing her prices or changing how she runs her business? Why?

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Free and Easy Window Cleaning Job Number Job Price Labor Supplies Overhead 15 $500.00 $255.00 $75.00 $27.50 18 $375.00 $225.00 $52.50 $20.63 25 $250.00 $155.00 $30.00 $13.75 32 $300.00 $174.00 $39.00 $16.50 35 $450.00 $234.00 $67.50 $24.75 40 $600.00 $288.00 $108.00 $33.00