E8.9 Rey Custom Electronics (RCE) 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. (use time-and-material pricing to determine bill)

Time Charges Material loading charges

Technicians' wages and benefits $150,000 -

Parts manager's salary/benefits - $34,000

Office employees salary/benefits 30,000 15,000

Other overhead 15,000 42,000

Total budgeted costs $195,000 $91,000

The company has budgeted for 6,250 hours of technician time during the coming year. It desires a $38 profit margin per hour of labor and an 80% profit on parts. It estimates the total invoice cost of parts and materials in 2020 will be $700,000

Instructions:

a - compute the rate charged per hour of labor

b- compute the material loading percentage.

c- RCE has just received a request for a bid from Buil 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.