Ignatenko's Custom Electronics (ICE) sells and installs complete security, computer, audio, and video systems for homes. On newly constructed homes it provides bids using time-and-material pricing. The following budgeted cost data are available.

The company has budgeted for 6,250 hours of technician time during the coming year. It desires a $38 profit margin per hour of labor and a 100% profit on parts. It estimates the total invoice cost of parts and materials in 2014 will be $700,000.

Instructions

(a) Compute the rate charged per hour of labor. (Round to two decimal places.)

(b) Compute the material loading percentage. (Round to two decimal places.)

(c) ICE has just received a request for a bid from Buil Builders on a $1,200,000 new home. The company estimates that it would require 80 hours of labor and $40,000 of parts. Compute the total estimatedbill.

Transcribed Image Text:

Material Loading Charges Time Charges $150,000 Technicians wages and benefits Parts managers salary and benefits Office employee's salary and benefits 28,000 15,000 $193,000 $34,000 15,000 42,000 $91,000 Other overhead Total budgeted costs