Question

1. Gibco Service has budgeted the following time-and-material for 2019: Budgeted Costs For 2019 Time Charges $38,000 Material Charges Painters' wages and benefits Service manager's salary and benefits Office employee's salary and benefits Cost of paint Overhead (supplies, utilities, etc.) 12,000 $24,000 3.000 60,000 7,500 11,000 Gibco budgets 4,200 hours of paint time in 2019 and will charge a profit of $10 per hour on the labour rate, in addition to a 25% mark-up on the cost of paint. On February 15, 2019, Gibco is asked to prepare a price estimate to paint a building. Gibco estimates that this job will take 12 labour hours and $700 in paint. Instructions Calculate the labour rate for 2019. b) Calculate the material loading charge rate for 2019. Prepare a time-and-materials price estimate for painting the building

Answer 1

solution: Time Charges total hours per hour charge 9.05 2.86 computation of labor rate per hour Painters' wages and benefits Office employee's salary and benefits Other overhead Total budgeted costs profit margin labor rate charge per hour 38,000 12,000 11,000 61,000 4,200 4,200 4,200 4,200 2.62 14.52 10.00 24.52 total invoice cost of paint | matrial loading charge computation of material loading charge percentage Service manager's salary and benefits Office employee's salary and benefits material loading charges 24,000 3,000 27,000 _ 7,500 34,500 = 60,000 60,000 60,000 Other overhead Total budgeted costs profit margin material loading charge rate 45.00% 12.50% 57.50% 25.00% 82.50% 294.29 c) calculation of total estimated bill labor charge (12 hours* $ 24.52 per hour) material charges cost of paint material loading charge (700*82.50%) Total time and material price estimate 700.00 577.50 L. 1,277.50 1,571.79