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Shale Remodeling uses time and materials pricing. It is setting prices for next year using the following information: Labor rate, including fringe benefits$75per hourAnnual labor hours 6,350hoursAnnual materials purchase$1,206,250 Materials purchasing, handling, and storage$241,250 Overhead for depreciation, taxes, insurance, etc.$670,000 Target profit margin for both labor and materials 25% What should Shale set as the materials markup per dollar of materials used

Sagot :

Tundexi

Answer:

45%

Explanation:

Annual material purchase                                         $1,206,250

Material purchasing, handling and storage cart      $241,250

Material purchasing, handling and storage % on          20%

material purchase ($241,250/$1,206,250*10)

Target profit margin                                                         25%

Material markup per dollar of material used              45%

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