Question
Suburban Heating, Inc., installs heating systems in new homes built in suburban Philadelphia. Jobs are priced using the time and materials method. The following predictions
Suburban Heating, Inc., installs heating systems in new homes built in suburban Philadelphia. Jobs are priced using the time and materials method. The following predictions pertain to the companys operations for the next year. |
Labor rate, including fringe benefits | $ | 30.00 | per hour |
Annual labor hours | 10,000 | hours | |
Annual overhead costs: | |||
Material handling and storage | $ | 49,125 | |
Other overhead costs | $ | 145,000 | |
Annual cost of materials used | $ | 327,500 | |
|
The president of Suburban Heating, B. T. Ewing, is pricing a job involving the heating systems for six houses to be built by a local developer. He has made the following estimates. |
Material cost | $ | 79,000 | |
Labor hours | 400 | ||
|
Required: |
Suburban Heating adds a markup of $8.00 per hour on its time charges, but there is no markup on material costs. |
1-a. | Calculate the total time charge. (Round your answer to 2 decimal places.) |
Total time charges: ? per hours |
1-b. | Calculate the material charge percentage. |
Material Charge: ? % |
2. | Compute the price for the job. (Do not round intermediate calculations.) |
Price of the job: ? |
3. | What would be the price of the job if Suburban Heating also added a markup of 20 percent on all material charges (including material handling and storage costs)? (Do not round intermediate calculations.) |
Price of the job: ? |
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