Patrick Custom Electronics (PCE) sells and installs complete security, computer, audio, and video systems for homes. On newly constructed homes it provides bids using time-and- material pricing. The following budgeted cost data are available.

Material

Time Loading

Charges Charges

Technicians wages and benefits $150,000

Parts managers salary and benefits $30,000

Office employees salary and benefits 30,000 13,400

Other overhead 15,000 31,000

Total budgeted costs $195,000 $74,400

The company has budgeted for 6,000 hours of technician time during the coming year. It desires a $30 profit margin per hour of labor and an 80% profit on parts. It estimates the total invoice cost of parts and materials in 2017 will be $620,000.

Instructions

(a) Compute the rate charged per hour of labor. (Round to two decimal places.)

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

(c) PCE has just received a request for a bid from Brock Casey on a $1,200,000 new home.

The company estimates that it would require 80 hours of labor and $40,000 of parts.

Compute the total estimated bill.