Second Chance Welding rebuilds spot welders for manufacturers. The following budgeted cost data for 2022 is available for Second Chance.

The company desires a $30 profit margin per hour of labor and a 20% profit margin on parts. It has budgeted for 7,600 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2022 will be $400,000.

Instructions

a. Compute the rate charged per hour of labor.

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

c. Pace Corporation has requested an estimate to rebuild its spot welder. Second Chance estimates that it would require 40 hours of labor and $2,000 of parts. Compute the total estimated bill.

Transcribed Image Text:

Material Time Loading Charges Charges Technicians' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits $228,000 $42,500 38,000 9,000 Other overhead 15,200 24,000 Total budgeted costs $281,200 $75,500