Computer Repair Inc. uses time and materials pricing, and each year it reviews its rates in light of the actual costs incurred in the prior year. Actual costs incurred last year in connection with repair work and in connection with the company$$s parts inventory are shown below:

Customers were billed for $20,000$ hours of repair work last year.

The company has a target profit of $$10$ per hour of repair service time and a target profit of $40\%$ of the invoice cost of parts used. During the past year, the company billed repair service time at $$50$ per hour and added a materials loading charge of $40\%$ to parts. Management feels these rates may now be inadequate, since costs have risen somewhat over the last year.

Repairs Parts

Repair technicians$$wages $ $480,000$

Repair service manager$$salary $56,000$

Parts manager$$salary $ $60,000$

Repairs and parts assistant$$salary $28,8007,500$

Retirement benefits $(20\%$ of salaries and wages$)112,96013,500$

Health insurance $(5\%$ of salaries and wages$)28,2403,375$

Utilities $120,00024,000$

Truck operating costs $19,200$

Property taxes $9,2805,400$

Liability and fire insurance $6,7203,000$

Supplies $1,200225$

Rent$$building $38,40033,000$

Depreciation$$trucks and equipment $59,200$

Invoice cost of parts used $600,000$

Total costs for the year $ $960,000$ $ $750,000$

Required:

$1.$ Using the above data, compute the following:

a$.$ The rate that would be charged per hour of repair service time using time and materials pricing.

b$.$ The materials loading charge that would be used in billing jobs. The materials loading charge should be expressed as a percentage of the invoice cost.

$2.$ Assume that the company adopts the rates that you have computed in $(1)$ above. What should be the total price charged on a repair job that requires six hours of service time and parts with an invoice cost of $$500?$

$3.$ This part of the question is not part of your Connect assignment.