Answered

Welcome to Westonci.ca, where finding answers to your questions is made simple by our community of experts. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

HH Auto Repair reports the following information for the coming year.
Labor rate, including fringe benefits $ 45 per labor hour
Annual labor hours 10,900 hours
Annual materials (parts) purchases $2,090,000
Annual overhead costs:
Materials purchasing, handling, and storage $ 355,300
Other overhead (depreciation, insurance, taxes, rent) 185,300
Target profit margin (on both labor and materials) $ 33 %
1. Compute the price (rate) per hour of direct labor. (Round your answer to 2 decimal places.)
2. Compute the materials markup (in %).
3. What price should the company quote for a job requiring five labor hours and $670 in parts? (Round your answer to 2 decimal places.)

Sagot :

Answer: See explanation

Explanation:

1. Compute the price (rate) per hour of direct labor.

This will be:

= [45 + (185,300 / 10,900)]× 1.33

= (45 + 17) × 1.33

= 62 × 1.33

= $82.46

2. Compute the materials markup.

This will be:

= =(355,300 / 2090,000) + 33%

= 0.17 + 33%

= 17% + 33%

= 50%

3. What price should the company quote for a job requiring five labor hours and $670 in parts?

This will be:

= (670 × 1.5) + (82.46 × 5)

= 1005 + 412.3

= $1417.30

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.