Second Chance Welding rebuilds spot welders for manufacturers. The following bud

Question

Second Chance Welding rebuilds spot welders for manufacturers. The following budgeted cost data for 2017 is available for Second Chance. Time Charges Material Loading Charges Technicians' wages and benefits $238,000 - Parts manager's salary and benefits - $40,100 Office employee's salary and benefits 49,000 7,092 Other overhead 35,000 27,160 Total budgeted costs $322,000 $74,352 The company desires a $37.00 profit margin per hour of labor and a 20.00% profit margin on parts. It has budgeted for 7,000 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2017 will be $388,000. Compute the rate charged per hour of labor. (Round answer to 2 decimal places, e.g. 10.50.) Labor rate $ per hour LINK TO TEXT Compute the material loading percentage. (Round answer to 3 decimal places, e.g. 10.501.) Material loading percentage % LINK TO TEXT Pace Corporation has requested an estimate to rebuild its spot welder. Second Chance estimates that it would require 36 hours of labor and $2,300 of parts. Compute the total estimated bill. (Round answer to 2 decimal places, e.g. 10.50.) Total estimated bill $

Explanation / Answer

(a) Rate charged per hour: Total time charges 322000 Budgeted hours 7000 Time charges per hour=322000/7000=$46 Rate charged per hour=46+37=$83 per hour (b) Material loading % Total material loading charge 74352 Estimated invoice cost 388000 Material loading charge per invoice % 19.16% Add:Profit margin 20% Material loading % 39.16% © Total estimated bill: Labor charges 36*83 2988 Material charges: Cost of parts 2300 Material loading charges (2300*39.16%) 901 3201 Total estimated bill 6189

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