Answered

At Westonci.ca, we connect you with the answers you need, thanks to our active and informed community. Get immediate and reliable answers to your questions from a community of experienced professionals on our platform. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly 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

Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Get the answers you need at Westonci.ca. Stay informed with our latest expert advice.