Coronado Industries has the following budgeted costs for the next year: Time Cha

Question

Coronado Industries has the following budgeted costs for the next year: Time Charges $100000 Material Charges Shop employees' wages and benefits Parts manager's salary and benefits Office em Other overhead 45000 15000 40000 300000 ployee's salary and benefits 15000 5000 Invoice cost of parts and materials Total budgeted costs $120000$400000 Coronado Industriesbudgets 7500 hours of repair time and it desires a profit margin of $25 per hour of labor. A markup on material cost is assumed to be 40%. Coronado estimates that the repairs to a Cadillac Escalade damaged in an accident will take 45 hours of labor and $3500 in parts and materials. The total cost of the repairs is $5620 $7445 $5600. $6745

Explanation / Answer

Solution to the given question is $ 6745.

Explanation:

Total budgeted labour charges : $ 120000

Budgeted labour hours : 7500

Cost per labour hour = 120000/ 7500

=$ 16

Charged cost = cost + profit

= 16 + 25 =41 per labour hr

Total cost charged on Labour = 41 *45

=$ 1845

Charged cost on material = $3500* 40 % + 3500

=1400+ 3500=4900

Total cost = 4900 +1845

=$ 6745

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