Refer to Exhibit 15–7. Suppose the Repair Department of Sydney Sailing Supplies adds a markup of 5 percent on the material charges of a job (including the cost of material handling and storage).

Required:

1. Rewrite the material component of the time and material pricing formula to reflect the markup on material cost.

2. Compute the new price to be quoted on the yacht refurbishment described in Exhibit 15–7.