Exercise 167 (Part Level Submission) (a1) SAVE FOR LATER SUBMIT ANSWER (a2) The

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Exercise 167 (Part Level Submission)

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Exercise 167 (Part Level Submission)

Silver Spoon Service repairs commercial food preparation equipment. The following budgeted cost data is available for 2016:
Time Charges Material Charges Technicians' wages and benefits $500,000 Parts manager's salary and benefits $72,000 Office manager's salary and benefits 112,000 18,000 Other overhead 48,000 135,000 Total budgeted costs $660,000 $225,000

Silver Spoon has budgeted for 10,000 hours of technician time during the coming year. It desires a $54 profit margin per hour of labor and a 40% profit margin on parts. Silver Spoon estimates the total invoice cost of parts and materials in 2016 will be $500,000.

Explanation / Answer

Rate charged per hour of labor = (660000/10000)+54= 120

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