Justin's Custom Electronics (JCE) 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 wants a $38 profit margin per hour of labour and a 100% profit on parts. It estimates the total invoice cost of parts and materials in 2016 will be $700,000.
Instructions
(a) Calculate the rate charged per hour of labour.
(b) Calculate the material loading percentage.
(c) JCE has just received a request for a bid from R. J. Builders on outfitting a $1.2-million new home. The company estimates that it would require 80 hours of labour and $40,000 in parts. Calculate the total estimated bill.

Transcribed Image Text:

Time Charges Technicians' wages and benefits Parts manager's salary and benefit:s Office employee's salary and benefits $150,000 28,000 15,000 $193,000 $34,000 12,000 42,000 $88,000 Other overhead Total budgeted costs