Ralphs Auto Repair uses time and material pricing. The body shop, which anticipates 20,000 direct labor hours of activity, has the following data:

Annual overhead costs:
Material handling and storage	$	15,500
Other overhead costs		50,000
Annual cost of materials used		193,750
Labor rate per hour, including fringe benefits		15
Hourly charge to achieve profit margin		11

Assuming there is no profit markup on material cost, the amount to be added to each dollar of material cost to obtain the total material charge is:

Multiple Choice

• $0.06.

• $0.08.

• $0.20.

• $0.23.

• None of the answers is correct.