Ignatenko's Custom Electronics (ICE) 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.
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Time Charges
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Material Loading Charges
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Technicians' wages and benefits
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$165,100
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-
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Parts manager's salary and benefits
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-
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$33,580
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Office employee's salary and benefits
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29,083
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9,328
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Other overhead
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14,351
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41,888
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Total budgeted costs
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$208,534
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$84,796
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The company has budgeted for 6,350 hours of technician time during the coming year. It desires a $37.72 profit margin per hour of labor and a 100% profit on parts. It estimates the total invoice cost of parts and materials in 2014 will be $680,000.
Compute the rate charged per hour of labor.
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Labor rate
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$
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per hour
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Compute the material loading percentage.
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Material loading percentage
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%
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ICE has just received a request for a bid from Buil Builders on a $1,205,000 new home. The company estimates that it would require 81 hours of labor and $38,000 of parts. Compute the total estimated bill.
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Total estimated bill
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$
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