Jack's Custom Electronics (JCE) sells and installs complete security, computer, audio, and video systems for homes. On newly constructed homes it provides bids using time and material pricing. The following budgeted cost data are available.

The company has budgeted for 6,000 hours of technician time during the coming year. It desires a \($36\) profit margin per hour of labor and a 100% profit on parts. It estimates the total invoice cost of parts and materials in 2003 will be $700,000.

Instructions

(a) Compute the rate charged per hour of labor. (Round to 2 decimal places.)

(b) Compute the material loading charge. (Round to 2 decimal places.)

(c) JCE has just received a request for a bid from R.J. Builders on a \($1,200,000\) new home. The company estimates that it would require 80 hours of labor and \($40,000\) of parts. Compute the total estimated bill.

Transcribed Image Text:

Time Material Charges Charges Technicians' wages and benefits $150,000 Parts manager's salary and benefits $32,500 Office employee's salary and benefits 28,000 12,000 Other overhead 12,000 42,000 Total budgeted costs $190,000 $86,500