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Other overhead
42,000
Total budgeted costs
$91,000
15,000
$195,000
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