Hawks Electronic Repair Shop has budgeted the following time and material for 20
ID: 2434972 • Letter: H
Question
Hawks Electronic Repair Shop has budgeted the following time and material for 2008.Hawks Electronic Repair Shop
Budgeted Costs for the Year 2008
---------------------------------------------------Time charges--------Material loading charges
Shop employees wages and benefits --------$108,000--------------0
Parts managers salary and benefits------------0----------------------$25,000
Office employees salary and benefits---------$20,000---------------$13,600
Overhead (supplies, deprec, advert, utitilies) $26,000------------$18,000
Total budgeted costs-----------------------------$154,000-------------$57,000
Hawks budgets 5,000 hours of repair time in 2008 and will bill a profit of $5 per labor hour along with a 30% profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is $100,000.
On January 5, 2008 Hawks is asked to submit a price estimate to fix a 72-inch big-screen TV.
Hawks estimates that this job will consume 20 hours of labor and $500 in parts.
Instructions
(a) Compute the labor rate for Hawks Electronic Repair Shop for the year 2008.
(b) Compute the material loading charge percentage for Hawks Electronic Repair Shop for the year 2008.
(c) Prepare a time-and-material price quotation for fixing the big-screen TV.
Explanation / Answer
(a) Compute the labor rate for Hawks Electronic Repair Shop for the year 2008. Shop employees wages and benefits --------$108,000 Office employees salary and benefits------- --$20,000 Overhead (supplies, deprec, advert, utitilies) $26,000 Total budgeted costs-----------------------------$154,000 Total Budgeted Hours 5,000 Per Hour cost $30.80 Add: Profit Margin $5.00 Labor hour rate $35.80 (b) Compute the material loading charge percentage for Hawks Electronic Repair Shop for the year 2008. Parts managers salary and benefits--------------------------$25,000 Office employees salary and benefits------------------------$13,600 Overhead (supplies, deprec, advert, utitilies) ------------$18,000 Total budgeted costs----------------------------- -------------$57,000 Estimated cost of Material used $100,000 Cost of material handing (%) 57 Add profit margin 30 Total material loading charge 87% (There is a totaling error – Total cost should be $56,600) (c) Prepare a time-and-material price quotation for fixing the big-screen TV. On January 5, 2008 Hawks is asked to submit a price estimate to fix a 72-inch big-screen TV. Hawks estimates that this job will consume 20 hours of labor and $500 in parts Cost of Material $500 Add: Material loading charges 87% $435 Labor charges for 20 Hours at $35.80 $716 Total cost of repairs $1,651 =====
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.