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c. Calculate the markup percentage on the total cost per session.
d. Calculate the target price per session.
E8-9
Rey Custom Electronics (RCE) sells and installs complete security,
computer, audio, and video systems for homes. On newly constructed
homes it provides bids using time and material pricing. The following
budgeted cost data are available.
Time Charges Material
Loading Charges
Technicians' wages and benefits
—

$150,000
—

Parts manager's salary and benefits
$34,000
Office employee's salary and benefits
15,000

30,000

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.