a. ) Determine the profit margin on materials. Profit marigin on materials % Exe

Question

a. ) Determine the profit margin on materials.

Profit marigin on materials %

Exercise 22-10 (Part Level Submission) Wasson's Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are as follows Material Loading Charges Time Charges Restorers' wages and fringe benefits Purchasing agent's salary and fringe benefits Administrative salaries and fringe benefits Other overhead costs Total budgeted costs $288,144 65,964 17,388 $371,496 $71,329 20,700 69,533 $161,562 The company anticipated that the restorers would work a total of 13,800 hours this year. Expected parts and materials were $1,203,000 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 $69.17 and that the material loading charge was 83.01%. (a) Your answer is correct Determine the profit margin per hour on labor. (Round answer to 2 decimal places, e.g. 10.50.) Profit margin on labor 42.25 per hour

Explanation / Answer

Total overhead for material loading charges = $161,562

Total expected parts and materials = $1,203,000

Material loading charge of cost = $161,562/$1,203,000 = 0.1343 = 13.43%

Total material loading charge including profit = 83.01%

Profit margin on materials = 83.01% - 13.43% = 69.58%

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