The following (b) Compute the desired ROI per uit. (luu (C) Compute the target s
ID: 2544707 • Letter: T
Question
The following (b) Compute the desired ROI per uit. (luu (C) Compute the target selling price. E8-8 Second Chance Welding rebuilds spot welders for manufacturers. The fol budgeted cost data for 2017 is available for Second Chance. Material Time Loading Charges Technicians' wages and benefits $228,000 Parts manager's salary and benefits $42,500 Office employee's salary and benefits 38,000 9,000 15,200 24,000 Other overhead Total budgeted costs $281,200 $75,500 Charges The company desires a $30 profit margin per hour of labor and a 20% profit margin parts. It has budgeted for 7,600 hours of repair time in the coming year, and estimates the the total invoice cost of parts and materials in 2017 will be $400,000. Instructions (a) Compute the rate charged per hour of labor. (b) Compute the material loading percentage. (Round to three decimal places.) (c) Pace Corporation has requested an estimate to rebuild its spot welder. Second Cita estimates that it would require 40 hours of labor and $2,000 of parts. Compute total estimated bill. E8-9 Rey Custom Electronics (RCE) sells and installe popol.Explanation / Answer
rate charged per hour of labor
total budgeted cost/budgeted hours for repairs)+profit margin per labor hour
(281200/7600)+30
67
material loading percentage
(total budgeted cost/invoice cost )+profit percentage
(75500/400000)+.20
38.88%
total estimated bill
(labor hours*labor rate)+(cost of material( material loading percentage)
(40*67)+(2000*38.88%)
3457.60
rate charged per hour of labor
total budgeted cost/budgeted hours for repairs)+profit margin per labor hour
(281200/7600)+30
67
material loading percentage
(total budgeted cost/invoice cost )+profit percentage
(75500/400000)+.20
38.88%
total estimated bill
(labor hours*labor rate)+(cost of material( material loading percentage)
(40*67)+(2000*38.88%)
3457.60