The company has budgeted for 6,250 hours of technician time during the coming year. It desires a $ 38 profit margin per hour of labor and an 80 % profit on parts. It estimates the total invoice cost of parts and materials in 2017 will be $ 700,000.
Instructions a. Compute the rate charged per hour of labor. b. Compute the material loading percentage.
c. RCE has just received a request for a bid from Buil Builders on a $ 1,200,000 new home. The company estimates that it would require 80 hours of labor and $ 40,000 of parts. Compute the total estimated bill.
P8-5A
Gutierrez Company makes various electronic products. The company is divided into a number of autonomous divisions that can either sell to internal units or sell externally. All divisions are located in buildings on the same piece of property. The Board Division has offered the Chip Division $ 21 per unit to supply it with chips for 40,000 boards. It has been purchasing these chips for $ 22 per unit from outside suppliers. The Chip Division receives $ 22.50 per unit for sales made to outside customers on this type of chip. The variable cost of chips sold externally by the Chip Division is $ 14.50. It estimates that it will save $ 4.50 per chip of selling expenses on units sold internally to the Board Division. The Chip Division has no excess capacity.
Instructions