Time and Materials Pricing - Illustration Times charge per hour of direct labor. Direct labor rate per hour.. Total hourly conversion cost. $40 Non-materials-related overhead per hour 10 50 11 $61 Target profit ($50 x 22%). Time charge per hour of direct labor. Materials markup per dollar of materials cost. Materials-related overhead Target profit margin Materials markup 3% 22% 25% 3 Job is estimated to use 300 direct labor hours (DLH) and $14,000 of direct materials. Time and materials pricing yields a $35,800 price. Time and Materials Price Direct labor (300 hours x $61 per DLH). Direct materials Materials markup ($14,000 25%) Time and materials price. x $18,300 14,000 3,500 $35,800 Knowledge Check 01 Marshall Grocery Delivery Service reports the following information: Direct labor rate per hour Non-materials related overhead per hour Materials-related overhead Materials markup Target profit margin The materials markup per dollar of materials cost is Materials markup $ 20 $ 25.80 4% of Direct materials cost 23% 20%