The following data is available for Wheels \'N Spokes Repair Shop for 2013: Repa
ID: 2453967 • Letter: T
Question
The following data is available for Wheels 'N Spokes Repair Shop for 2013:
Repair technicians' wages $360,000
Fringe benefits 80,000
Overhead 60,000
Total $500,000
The desired profit margin is $40 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5,000 labor hours will be worked in 2013. In March 2013, Wheels 'N Spokes repairs a bicycle that takes two hours to repair and uses parts of $240. The bill for this repair would be
A) $520.
B) $560.
C) $592.
D) $616.
Explanation / Answer
Answer: D)$616
The bill for this repair would be :
($500,000 ÷ 5,000) +$40=$140 per labor hours
($240 × 1.40) + ($140 × 2 hours ) = $616
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