Rey Custom Electronics (RCE) sells and installs complete security, computer, aud
ID: 2517270 • Letter: R
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 .
RCE has just received a request for a bid from Buil Builders on a $ 1,150,000 new home. The company estimates that it would require 75 hours of labor and $ 35,000 of parts. Compute the total estimated bill. (Round answer to 2 decimal places, e.g. 10.50.)
Charges Material
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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
Rate charged per labor hour 130,000/5000 +37 63 material load percentage 74750/650000+80% 91.5 % total estimated bill labor charges (75*63)= 4725 parts 35,000 material loading charges(35000*91.5%)= 32025 total estimated bill 71750 answer
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