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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.
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