Exercise 8-10 Wasson\'s Classic Cars restores dassic automobiles to showroom sta

Question

Exercise 8-10 Wasson's Classic Cars restores dassic automobiles to showroom status. Budgeted data for the current year are as follows. Time Charges Material Loading Charges Restorers' wages and fringe benefits Purchasing agent's salary and fringe benefits $65,423 20,800 77,867 $164,090 Administrative salaries and fringe benefits 43,775 13,493 $271,302 Other overhead costs Total budgeted costs The company anticipated that the restorers would work a total of 10,300 hours this year. Expected parts and materials were $1,211,000. In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant remembers that the hourly labor rate was $70.43 and that the material loading charge was 83.73%. Determine the profit margin per hour on labor. (Round answer to 2 decimal places, e.g. 10.50.) Profit margin on labor g per hour

Explanation / Answer

Profit margin on labor = $70.43 - ($271,302 / 10,300)

Target cost = $44.09 per hour

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