Computation of time charge rate

Total

Cost

Total

Hours

Per Hour

Charge

$21.60

Hourly labor rate for repairs

Shop employees' wages and benefits

$108.000 5.000

Overhead costs

Office employee's salary and benefits

Other overhead

Total

23,500

5,000

26,000

-

5,000

$157.500

5,000

Profit margin

Rate charged per hour of labor

[($108,000 = 5,000) + ($23,500 = 5,000) + ($26,000 = 5,000) + $10.00 = $41.50]

[(Shop emp. wages & bene. = Tot. hrs.) + (Off. emp. sal. & bene. = Tot. hrs.) + (Other OH = Tot. hrs.) +

Profit margin = Labor rate/hr.]

T

(b) Computation of material loading charge

4.70

5.20

31.50

10.00

41.50