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 $175,000 -        Parts manager's salary and benefits -        $39,000 Office employee's salary and benefits 28,000 6,600 Other overhead 7,000 19,000 Total budgeted costs $210,000 $64,600
The company desires a $30.00 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 $380,000.

Explanation / Answer

Labor rate = 210,000/7000 30 Add :profit margin 30 60 labor rate $60 per hour answer Material loading percentage = 64600/380,000= 17.00% Add:profit margin 20.00% material loading percentage   37.00% answer Total estimated bill labor charges 35hours *60 = 2100 Material parts 2,000 material loading charges (2000*17%) 340 2,340 Total estimated bill 4440 answer

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