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(1 of 2) Green Bay Welding repairs radiators. GB Welding's cost system has two cost categories: direct labor and direct materials. GB Weldking uses a
(1 of 2) Green Bay Welding repairs radiators. GB Welding's cost system has two cost categories: direct labor and direct materials. GB Weldking uses a time-and-materials pricing system, with direct labor marked up 80% and direct materials marked up 50% to recover all of his overhead costs and to earn a profit. Last winter, a customer came in with a cracked radiator. Upon inspecting the radiator, GB Welding had two options to present to the customer. They could either replace the radiator or repair it. The cost for both options is: Materials Repair Replace Labor 4 hrs 3 hrs $150 $280 Labor Rate $35 per hour What price would GB Welding quote to the customer to Repair? To Replace? $477 to repair, $609 to replace $435 to repair, $577 to replace $522 to repair, $693 to replace $290 to repair, $385 to replace Which option would give Steve more profit? Repair, profit is $187 Replace, Profit is $224 Repair, profit is $232 Replace, profit is $385
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