Question

Exercise M-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 $149,943 Material Loading Charges Technicians' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits Other overhead Total budgeted costs 28,069 15,822 $ 193,834 $34,700 4,780 36,387 $75,867 The company has budgeted for 6,620 hours of technician time during the coming year. It desires a $37.51 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 $658,000. Compute the rate charged per hour of labor. (Round answer to 2 decimal places, e.g. 10.50.) Labor rate per hour Compute the material loading percentage. (Round answer to 2 decimal places, e.g. 10.50.) Material loading percentage

Answer 1

1
Budgeted cost per labor hour	29.28	=193834/6620
Add: Profit margin	37.51
Labor rate	66.79	per hour
2
Material loading charges	11.53%	=75867/658000
Add: Profit on parts	80.00%
Material loading percentage	91.53%
3
Labor charges	5209.62	=78*66.79
Materials parts	44300.00
Material loading charges	40547.79	=44300*91.53%
Total estimated bill	90057.41