Rey Custom Electronics (RCE) sells and installs complete security, computer, aud

Question

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.

The company has budgeted for 5,000 hours of technician time during the coming year. It desires a $ 37.00 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 $ 650,000 .

Compute the rate charged per hour of labor. (Round answer to 2 decimal places, e.g. 10.50.)

Compute the material loading percentage. (Round answer to 2 decimal places, e.g. 10.50.)

   Time
Charges Material
Loading
Charges     Technicians' wages and benefits $ 100,000 -        Parts manager's salary and benefits -        $ 33,000 Office employee's salary and benefits 20,000 6,000 Other overhead 10,000 35,750 Total budgeted costs $ 130,000 $ 74,750

Explanation / Answer

SOLUTION

(A)

(B)

Particulars Time charges ($) (A) Hours (B) Rate per hour ($) (A/B) Technicians' wages and benefits 100,000 5,000 20 Office employee's salary and benefits 20,000 5,000 4 Other overhead 10,000 5,000 2 Total hourly cost 26 Add: Profit margin 37 Rate charged per labor hour 63

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.