Problem M-3 (Part Level Submission) (a) Open Show Work SHOW SOLUTION SHOW ANSWER

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Problem M-3 (Part Level Submission)

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Problem M-3 (Part Level Submission)

Sutton’s Electronic Repair Shop has budgeted the following time and material for 2017.
SUTTON’S ELECTRONIC REPAIR SHOP
Budgeted Costs for the Year 2017 Time Charges Material Loading Charges Shop employees’ wages and benefits $ 96,830 Parts manager’s salary and benefits $ 25,400 Office employee’s salary and benefits 20,010 14,600 Overhead (supplies, depreciation, advertising, utilities) 22,310 20,000 Total budgeted costs $ 139,150 $ 60,000
Sutton’s budgets 4,600 hours of repair time in 2017 and will bill a profit of $ 14 per labor hour along with a 21 % profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is $ 100,000 .

On January 5, 2017, Sutton’s is asked to submit a price estimate to fix a 72-inch flat-screen TV. Sutton’s estimates that this job will consume 6 hours of labor and $ 270 in parts.

(a)

Your answer is correct. Compute the labor rate for Sutton’s Electronic Repair Shop for the year 2017. (Round answer to 2 decimal places, e.g. 10.50.)
Labour rate $

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(b)

Compute the material loading charge percentage for Sutton’s Electronic Repair Shop for the year 2017.
Material loading percentage

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Explanation / Answer

Material loading charge = (60000/100000)+21% = 81%

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