Question

Second Chance Welding rebuilds spot welders for manufacturers. The following budgeted cost data for 2020 is available for Second Chance. Material Loading Time Charges Charges $192,400 Technicians' wages and benefits $39,600 Parts manager's salary and benefits Office employee's salary and benefits 51,800 9.400 Other overhead 14,800 19,600 Total budgeted costs $259,000 $68.600 The company desires a $39 profit margin per hour of labor and a 27.00% proft margin on parts. It has budgeted for 7,400 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2020 will be $392,000. Compute the rate charged per hour of labor. Labor rate $ per hour Compute the material loading percentage. (Round answer to 3 decimal places, e.g. 10.501%.) Material loading percentage % Pace Corporation has requested an estimate to rebuild its spot welder. Second Chance estimates that it would require 38 hours of labor and $2,800 of parts. Compute the total estimated bill. (Round answer to 2 decimal places, eg. 10.50.) Total estimated bill

Answer 1

According to budgeted cost data total estimated bill is $6858

Budgeted cost per labor hour         35                = 259000/7400
+Profit margin                                   39
Labor rate                                         74                 per hour


Material loading charges              17.5%              = 68600/392000
+Profit on parts                              27%  
Material loading percent             44.5%    

Labor charges                             2812                 = 38×74
Materials parts                              2800  
Material loading charges             1246                = 2800×44.5%
Total estimated bill                      6858

Budgeted cost data- Budgeted costs are anticipated future costs that the company anticipates racking up in the future. In other words, based on anticipated revenues and sales, it is an estimated expense that management anticipates will be incurred in a future period.

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