Question

Provided is the following data for Marina Bay, a boat repair shop.

	Repairs	Material Loading Charges
Mechanics’ wages and benefits	$103,500
Parts manager’s salary and benefits		$11,500
Office employee’s salary and benefits	20,700	2,300
Other overhead (supplies, depreciation, property taxes, advertising, utilities)	26,800	14,400
Total budgeted costs	$151,000	$28,200

Employees worked 5,000 hours for repair work. Marina Bay desires a profit margin of $8 per hour.

The total invoice cost of parts and materials used was $120,000. Marina Bay desires a 20% profit margin on the invoice cost of parts and materials.

Required

Using the time and material pricing

1. Calculate the rate that would be charged per hour of repair service.
2. Calculate the materials loading charge that would be used in billing jobs. The materials loading charge should be expressed as a percentage of the invoice cost.
3. Calculate the charge for a job that requires 50 hours of labour and $3,600 in parts and materials

Answer 1