Loading Charges
Time Charges Material
Technicians ' wages and benefits $ 150,000—
Parts manager ' s salary and benefits— $ 34,000
Office employee ' s salary and benefits 30,000 15,000
Other overhead 15,000 42,000
Total budgeted costs $ 195,000 $ 91,000
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