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EXERCISE 1 2 A - 3 Time and Materials Pricing [ LO 4 ] Ronnie's Repair Company provides repair services for small engines and uses
EXERCISE A
Time and Materials Pricing LO
Ronnie's Repair Company provides repair services for small engines and uses time and materials pricing. The company has budgeted the following costs
for next year:
Mechanics' wages and benefits
Other repair costs, except for partsrelated costs
In total, the company expects to have hours of billable repair time next year. According to competitive conditions, the company believes it should
aim for a profit of $ per hour of each mechanic's time. The competitive markup on parts is of invoice cost.
Required:
Compute the time rate and the materials loading charge that would be used to bill jobs.
One of the company's mechanics has just completed a repair job that required hours of time and $ in parts invoice cost Compute the amount
that would be billed for the job.
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