The Reliable TV Repair Shop has budgeted the following costs for next year:

In total, the company expects 10,000 hours of repair time it can bill to customers. According to competitive conditions, the company believes it should aim for a profit of £6 per hour of repair time. The competitive mark-up on materials is 40 per cent of invoice cost. The company uses time and material pricing.

Required
1. Compute the time rate and the material loading charge that will be used to bill jobs.
2. One of the company’s repair technicians has just completed a repair job that required 2.5 hours of time and £80 in parts (invoice cost). Compute the amount that will be billed for the job.

Transcribed Image Text:

Repair technicians: Wages Fringe benefits Repairs operation per year Materials: Costs of ordering, handling and storing parts £120,000 30,000 90,000 20% of invoice cost