Question 12

I need help with question 12. Is answer A correct? Please explain. Thanks!

Question 12 Not yet answered Marked out of 1.00 Flag question Premier Painting Services, Inc. provides residential painting services for three home building companies, Glendale, Highwood, and Lexington, and it uses a job costing system for determining the costs for completing each job. The job cost system does not capture any cost incurred by Premier for return touch-ups and refinishes after the homeowner occupies the home. Premier paints each house on a square footage contract price, which includes painting as well as all refinishes and touch-ups required after the homes are occupied. Each year, the company generates about one-third of its total revenues and gross profits from each of the three builders. The Premier owner has observed that the builders, however, require substantially different levels of support following the completion of jobs. The following data have been gathered Support Activity Driver Cost per Driver Unit Major refinishes Hours on jobs $40 Touch-ups Number of visits $60 Communication Number of calls $12 Builder Major Refinishes Touch-ups Communication Glendale 70 125 39 Highwood 125 105 180 Lexington 305 180 175Builder Major Refinishes Touch-ups Communication Glendale 70 125 39 Highwood 125 105 180 Lexington 305 180 175 Assume that each of the three customers produces Gross Profit of $50,000. The profitability from each builder after taking into account the support activity required for each builder is: Select one: A. $39,232 Glendale, $36,540 Highwood, $24,900 Lexington O B. $35,540 Glendale, $40,140 Highwood, $36,040 Lexington O C. $40,140 Glendale, $35,540 Highwood, $36,540 Lexington O D. $40,000 Glendale, $65,000 Highwood, $38,000 Lexington