Question

Rey Custom Electronics (RCE) sells and installs complete security, computer, audio, and video systems for homes. On newly constructed 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 $150,000 - Parts manager's salary and benefits - $34,000 Office employee's salary and benefits 30,000 15,000 Other overhead 15,000 42,000 Total budgeted costs $195,000 $91,000 The company has budgeted for 6,250 hours of technician time during the coming year. It desires a $38 profit margin per hour of labor and an 80% profit on parts. It estimates the total invoice cost of parts and materials in 2020 will be $700,000. Compute the rate charged per hour of labor. (Round answer to 2 decimal places, e.g. 10.50.) Labor rate $ per hour Compute the material loading percentage. Material loading percentage % 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 bill. Total estimated bill $

Answer 1

1)Labor rate per hours = cost per hour + profit margin

                                         = (195000/6250) + 38

                                        =$69.2 per hr

2) total cost per part : 91000/700000 = 13%

Material load percentage = total cost%+ margin %

                                              = 13% + 80% = 93%

3) Total estimated bill:

Labor charges (69.2*80)	5536
Material charges
Cost of parts	40000
Material loading%(40000*93%)	37200
Total estimated bill	82736