Rey Custom Electronic (REC) sells and installs complete security, computer, audio. and video system for homes. On newly constructed homes it provides bids using time and material pricing. The following budgeted cost data are available.

Time charges Material loading charges

Technicians wages and benefits $150,000

Parts managers's salary and benefits $34,000

Office employee's salary and benefits 30,000 15,000

other overhead 15,000 42,000

Total budgeted costs $195,000 $91,000

The company has budgeted for 6,250 hours of technician time during the coming year. It desires a $38 profit margin per hour of labor and an 80% profit parts. It estimates the total invoice cost of parts and materials 2017 will be $700,000.

Instructions

(a) Compute the rate charged per hour of labor.

(b) Compute the material loading percentage

(c) RCE has just received a request for a bid from Buil Builders 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.