Question

Question 3 1 pts The following data is available for HVAC Specialists: Repair specialists' wages 150,000 Repair specialists' fringe benefits 60,000 Purchasing and parts' inventory manager's wages 40,000 Purchasing and parts' inventory manager's fringe benefits 15,000 Human resources' employee salary and benefits 50,000 (90% of HR employee's time applies to repair specialists and 10% to parts' employee) The desired profit margin is $25 per labor hour and 60% for parts and materials HVAC estimates that repair specialists will incur 6,000 labor hours during the year and the total invoice cost of parts and materials will be $250,000. Using time and material pricing, compute the total bill (rounded to whole dollars) for a job that required 10 hours of labor and $1,000 of parts. $2,290 $2,655 $2,375 $2,515

Answer 1

| Computation of labour hour rate Particulars Amount Repair specialists' wages 1,50,000.00 Repair specialists' fringe benefits 60,000.00 HR employee's salary 45,000.00 (90% time in Repairs, $50,000 x 90%) Total Cost (A) 2,55,000.00 Annual Labour hours (B) 6000 hours Labour cost per hour (A/B) $ 42.50 per hour Desired profit margin per hour $ 25.00 Labour hour-bill rate $ 67.50 per hour 11 Computation of Parts and material rate Particulars Amount Invoice cost of Parts and materials 250000 Manager's Wages 40000 Manager's fringe benefits 15000 HR employee's salary 5000 (10% time in Parts, $50,000 x 10%) Total Cost (A) 3,10,000.00 Desired profit Margin 1,86,000.00 Desired Material Value 4,96,000.00 Parts and Material rate per $ ($4,96,000 / $2,50,000) 1.98

Computation of Total bill for the Job Particulars Amount Labour hours required 10.00 hours Labour hour-billing rate 67.50 per hour Total Labour Price ( 10 x $67.5) (A) 675.00 Material parts required costing Desired Part rate per $ Material parts Billing Price ($1000 x1.98) (B) $ 1,000.00 1.98 1980 Total Bill for the Job (A+B) $_2,655.00 Thus, second Option is correct

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