E7–4 Time allowed: 15 minutes The Reliable TV Repair Shop had budgeted the following costs for next year:

In total, the company expects 10,000 hours of repair time it can bill to customers. According to competitive conditions, the company believes it should aim for a profit of £6 per hour of repair time. The competitive markup on materials is 40% of invoice cost. The company uses time and material pricing.
Required 1 Compute the time rate and the material loading charge that would be used to bill jobs.
2 One of the company’s repair technicians has just completed a repair job that required 2.5 hours of time and £80 in parts (invoice cost). Compute the amount that would be billed for the job.

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Repair technicians: Wages Fringe benefits Repairs operation per year Materials: Costs of ordering, handling, and storing parts 120,000 30,000 90,000 20% of invoice cost