5. Greasy S poon Service repairs commercial food preparation equipment. The foll

Question

5. Greasy S poon Service repairs commercial food preparation equipment. The following budgeted cost data is available for 2006 Time Material Charges Charges Technicians' wages and benefits$600,000 Parts manager's salary and benefits .72,000 Office manager's salary and benefitsl 12,00018,000 Is Other overhead Total budgeted costs 48,000 110,000 $200,000 $760,000 rs oftechnician time during the coming year. It desires a S61 profit margin per hour of labor and a 50% profit margin on parts. Greasy Spoon estimates the total invoice cost of parts and materials in 2006 will be $500,000. Instructions 1. Compute the rate charged per hour of labor 2. Compute the material loading charge. 3. Greasy Spoon has received a request from Lime Corporation for an estimate to repair a commercial fryer. The company estimates that it would take 20 hours of labor and $8,000 of parts. Compute the total estimated bill.

Explanation / Answer

1 Solution:- Calculation of Rate charged Per hour of labour -

2 Answer :- Calculation of material loading charge:-

3 Answer :- Computation of total estimated bill:-

Particulars Total Cost Total Hours Per Hour Charge Hourly Labou cost rate for repairs: Technicians wages and benefit 600000 10000 60.00 Overhead Costs: Office Managers Salary and benefits 112000 10000 11.20 Other Overheads 48000 10000 4.80 760000 10000 76.00 Profit Margin 64.00 Rate charged Per hour of labour 140.00

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