Answered

At Westonci.ca, we provide reliable answers to your questions from a community of experts. Start exploring today! Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields 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

Thank you for trusting us with your questions. We're here to help you find accurate answers quickly and efficiently. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Stay curious and keep coming back to Westonci.ca for answers to all your burning questions.