Chapter 11 Page 428 Problem P8

Time and materials pricing in a Service Business Route 66 Car Repair performs routine maintenance on rental vehicles. Recently, the local auto rental business had its fleet serviced. The company uses the time and material pricing system and data from the previous year to compute markup percentages for overhead related to parts and materials and overhead related to direct labor. It adds markups of 100% to the cost of materials and parts and 120% to the cost of direct labor to cover overhead and profit. The following materials parts and direct labor are needed to repair the rental fleet:

Quantity Unit Price Hours Hourly Rate

Materials and parts: Direct Labor: 24 spark plugs $0.50 38 Mechanic hours $28.20 50 Oil, quarts 2.50 61 Assistant mechanic hours 14.00 12 hoses 11.20 1 sun visor 13.50 36 coolant, quarts 6.50 4 clamps 5.50 5 emergency kits 12.40 40 washer fluid 1.25 4 tires 300.00

Prepare a complete billing for this job. Include itemized amounts for each type of materials, parts, and direct labor. Follow the time and materials pricing approach, and show the total price for the job.