Exercise 22-8 (Part Level Submission) Second Chance Welding rebuilds spot welder
ID: 2520664 • Letter: E
Question
Exercise 22-8 (Part Level Submission) Second Chance Welding rebuilds spot welders for manufacturers. The following budgeted cost data for 2017 is available for Second Chance Time Charges $229,100 Material Loading Charges Technicians' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits55,300 Other overhead Total budgeted costs $40,500 10,735 20,450 $71,685 31,600 $316,000 The company desires a $37.00 profit margin per hour of labor and a 21.00% profit margin on parts. It has budgeted for 7,900 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2017 will be $409,000Explanation / Answer
Calculation of Material Loading Percentage
Material Loading Charges for 2017 = $71,685
Total Estimated Cost of parts and materials = $409,000
Material loading as a percentage of total cost = $71,685/$409,000 = 17.527%
Material Loading Percentage = 17.527%+21.00% = 38.527%
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