EXERCISE $12$A$-3$

Time and Materials Pricing $[$ LO$4]$

Ronnie's Repair Company provides repair services for small engines and uses time and materials pricing. The company has budgeted the following costs

for next year:

Mechanics' wages and benefits

Other repair costs, except for parts$-$related costs

In total, the company expects to have $50,000$ hours of billable repair time next year. According to competitive conditions, the company believes it should

aim for a profit of $$8$ per hour of each mechanic's time. The competitive markup on parts is $40\%$ of invoice cost.

Required:

Compute the time rate and the materials loading charge that would be used to bill jobs.

One of the company's mechanics has just completed a repair job that required $12$ hours of time and $$100$ in parts $($invoice cost$).$ Compute the amount

that would be billed for the job.