Momentum Bike Repair Shop has budgeted the following time and material for 2011.

Momentum budgets 3,000 hours of repair time in 2011 and will bill a profit of $8 per labor hour along with a 20% profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is $80,000.
On January 5, 2011, Momentum is asked to submit a price estimate to fix a Giant Mountain bike. Momentum estimates that this job will consume 3 hours of labor and $180 in parts.

Instructions
(a) Compute the labor rate for Momentum Bike Repair Shop for the year 2011.
(b) Compute the material loading charge percentage for Momentum Bike Repair Shop for the year 2011.
(c) Prepare a time-and-material price quotation for fixing the Giant Mountainbike.

Transcribed Image Text:

MOMENTUM BIKE REPAIR SHOP Budgeted Costs for the Year 2011 Material Time Loading Charges Charges Shop employees' wages and benefits Parts supervisors salary and benefits Office employees salary and benefits $36,000 $20,000 15,000 10,000 Overhead (supplies, depreciation, advertising, utilities) 19,000 15,000 $70,000 $45,000 Total budgeted costs