Ernie's Electronic Repair Shop has budgeted the following time and material for 2002.

Ernie's budgets 5,000 hours of repair time in 2002 and will bill a profit of \($5\) per labor hour along with a 30% profit markup on the invoice cost of parts.
On January 5, 2002 Ernie's is asked to submit a price estimate to fix a 72" big-screen TV. Ernie's estimates that this job will consume 24 hours of labor and \($500\) in parts and materials.
Instructions

(a) Compute the labor rate for Ernie's Electronic Repair Shop for the year 2002.

(b) Compute the material loading charge rate for Ernie's Electronic Repair Shop for the year 2002.

(c) Prepare a time and material price quotation for fixing the big-screen TV.

Transcribed Image Text:

ERNIE'S ELECTRONIC REPAIR SHOP Budgeted Costs for the Year 2002 Time Charges Material Charges Shop employees' wages and benefits $105,000 Parts manager's salary and benefits $ 25,400 Office employee's salary and benefits 20,000 10,600 Invoice cost of parts used 100,000 Overhead (supplies, depreciation, advertising, utilities) 24,000 18,000 Total budgeted costs $149,000 $154,000