Lemond Bike Repair Shop has budgeted the following time and material for 2022: 

Lemond budgets 2,500 hours of repair time in 2022. It will bill a profit of $5 per labour hour along with a 15% profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is $75,000. 

On January 5, 2022, Lemond is asked to submit a price estimate to fix a mountain bike. Lemond estimates that this repair will consume four hours of labour and $200 in parts and materials.

Instructions 

a. Calculate the labour rate for Lemond Bike Repair Shop for 2022. 

b. Calculate the material loading charge percentage for Lemond Bike Repair Shop for 2022. 

c. Prepare a time-and-material price quotation for the repair of the mountain bike.

Transcribed Image Text:

Shop employees' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits Overhead (supplies, depreciation, advertising, utilities) Total budgeted costs Time Charges $36,000 15,000 19,000 $70,000 Material Charges $20,000 10,000 15,000 $45,000