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KiRa [710]
3 years ago
7

Rey Custom Electronics (RCE) sells and installs complete security, computer, audio, and video systems for homes. On newly constr

ucted homes it provides bids using time-and-material pricing. The following budgeted cost data are available.
Time Charges Material Loading Charges
Technicians' wages and benefits $132,804 _______
Parts manager's salary and benefits _______ $34,000
Office employee's salary and benefits 23,380 11,000
Other overhead 15,401 48,675
Total budgeted costs $171,585 $93,675

The company has budgeted for 5,580 hours of technician time during the coming year. It desires a $38.86 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 $750,000.

a. Compute the rate charged per hour of labor.
b. Compute the material loading percentage.
c. RCE has just received a request for a bid from Buil Builders on a $1,200,000 new home. The company estimates that it would require 80 hours of labor and $40,000 of parts. Compute the total estimated bil.
Business
1 answer:
IrinaK [193]3 years ago
8 0

Answer:

The total estimated bil is $82,564.8

Explanation:

a. In order to calculate the rate charged per hour of labor we would have to use the following formula:

Labor rate per hour=<u>Total budgeted time charges</u> +Profit Margin

                                     Budgeted hours

=<u>$171,585</u> + $38.86

    5,580

=$69.61

The rate charged per hour of labor is $69.61

b. In order to calculate the material loading percentage we would have to use the following formula:

material loading=<u>Total budgeted material loadingcharges</u>+Profitpercentage

percentage           Total invoice of parts and materiales              on parts

material loading percentage=<u>$93,675    </u> + 80%

                                                 $750,000  

=92.49%

The material loading percentage is 92.49%

c. In order to calculate the total estimated bill we would have to use the following formula:

total estimated bill=(labor rate per hour×hours required)+(material loading percentage×parts required)+material

=($69.61×80)+(92.49%×$40,000)+$40,000

=$5,568.8+$36,996+$40,000

=$82,564.8

The total estimated bil is $82,564.8

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