Rainbow Painting Services Inc. paints interiors of residences and commercial structures. The firm's management has
established cost standards based on the amount of area to be painted.
Direct material ($18 per gallon of paint): $1.50 per 100 square feet
Directlabor: $2 per 100 square feet
Variable overhead: $0.60 per 100 square feet
Fixed overhead (based on 600,000 square feet per month): $1.25 per 100 square feet
Management has determined that 400 square feet can be painted by the average worker each hour. During May 2001,
the company painted 600,000 square feet of wall and ceiling space. The following costs were incurred:
Direct material 450 gallons purchased and used
Directlabor (1,475 hours)
Variable overhead
Fixed overhead
$ 8,550.00
12,242.50
3,420.00
7.740.00