Question
Greasy Spoon Service repairs commercial food preparation equipment. The following budgeted cost data is available for 2006: Time Material Charges Charges Technicians' wages and benefits
- Greasy Spoon Service repairs commercial food preparation equipment. The following budgeted cost data is available for 2006:
Time Material
Charges Charges
Technicians' wages and benefits $600,000
Parts manager's salary and benefits $ 72,000
Office manager's salary and benefits 112,000 18,000
Other overhead 48,000 110,000
Total budgeted costs $760,000 $200,000
Greasy Spoon has budgeted for 10,000 hours of technician time during the coming year. It desires a $64 profit margin per hour of labor and a 50% profit margin on parts. Greasy Spoon estimates the total invoice cost of parts and materials in 2006 will be $500,000.
Instructions
1. Compute the rate charged per hour of labor.
2. Compute the material loading charge.
3. Greasy Spoon has received a request from Lime Corporation for an estimate to repair a commercial fryer. The company estimates that it would take 20 hours of labor and $8,000 of parts. Compute the total estimated bill.
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