Exercise 22-8 (Part Level Submission) Second Chance Welding rebuilds spot welder

Question

Exercise 22-8 (Part Level Submission) Second Chance Welding rebuilds spot welders for manufacturers. The following budgeted cost data for 2017 is available for Second Chance Time Charges $229,100 Material Loading Charges Technicians' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits Other overhead Total budgeted costs 55,300 31,600 $316,000 $40,500 10,735 20,450 $71,685 The company desires a $37.00 profit margin per hour of labor and a 21.00% profit margin on parts. It has budgeted for 7,900 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2017 will be $409,000

Explanation / Answer

Wages per hours = budgeted cost/budgeted labour hours Wages per hour = $229,100/7,900 Wages per hour = $29 Particulars $ Wages $1,189 desired profit on wages $1,517 Material $3,000 Desired profit on material $630 Total Estimated bill $6,336

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