time-and-material pricing Chuck\'s Cars restores classic automobiles to showroom
ID: 2464381 • Letter: T
Question
time-and-material pricing Chuck's Cars restores classic automobiles to showroom status, and the expected parts and materials were $800,000 for 2017. Budgeted data for 2017 are: The company anticipated that the restores would work a total of 5,000 hour of labor this year, and will charge a $20 profit margin per hour of labor and a 15% profit margin on parts and materials. On February 15, 2017, the company is asked to prepare a price estimate to restore a car. Chuck's estimates that this job will take 15 hours of labor and $5,000 in parts and materials. Compute the rate charged per hour of labor. Compute the material loading charge rate. compute a time-and-material price estimate restoring the car.Explanation / Answer
Answer 1. Rate Charged per hour of Labor Restorers Salary & Fringe Benefits ($135000 / 5000 Hrs) 27.00 Overhead Applied Admn.Salaries & Fringe Benefits ($27000/ 5000 hrs) 5.40 Other Overhead ($10000 / 5000 hrs) 2.00 Total Cost 34.40 Add: Profit Margin per Hr. 20.00 Total Rate charged per hour of Labor 54.40 Answer 2. Material Loading Charge Rate (In % of Material) Purchasing Agent's Salary and Fringe Benefits 8.44 Overhead Applied Admn.Salaries & Fringe Benefits 2.81 Other Overhead 8.75 Total Cost 20.00 Add: profit Margin 15.00 Total Rate Charhe per Material Billed (in %) 35.00 Answer 3. Time & Material Price Estimate For restoring the Car Material Cost 5000 Add: Materaol Loading Charge (35% of $5000) 1750 Total Material Cost 6750 Add: Labour Cost (15 Hrs X $54.40) 816 Total Estimate 7566
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.