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As a service to its customers, Current Designs repairs damaged kayaks. This is especially valuable to customers that have made a significant investment in the composite kayaks. To price the repair jobs, Current Designs uses time-and-material pricing with a desired profit margin of $15 per labor hour and a 50% materials loading charge. Recently, Bill Johnson, Vice President of Sales and Marketing, received a phone call from a dealer in Brainerd, Minnesota. The dealer has a customer who recently damaged his composite kayak and would like an estimate of the cost to repair it. After the dealer emailed pictures of the damage, Bill reviewed the pictures with the repair technician and determined that the total materials charges for the repair would be $102. Bill estimates that the job will take 5 labor hours to complete. Following is the budgeted cost data for Current Designs: Repair-technician wages Fringe benefits Overhead $51,800 $18,500 $18,500 Current Designs has allocated 3,700 hours of repair time for the upcoming year. The customer has agreed to transport the kayak to the Winona production facility for the repairs. Determine the price that Current Designs would charge to complete the repairs for the customer.

As a service to its customers, Current Designs repairs damaged kayaks. This is especially valuable to customers that have made a significant investment in the composite kayaks. To price the repair jobs, Current Designs uses time-and-material pricing with a desired profit margin of $15 per labor hour and a 50% materials loading charge. Recently, Bill Johnson, Vice President of Sales and Marketing, received a phone call from a dealer in Brainerd, Minnesota. The dealer has a customer who recently damaged his composite kayak and would like an estimate of the cost to repair it. After the dealer emailed pictures of the damage, Bill reviewed the pictures with the repair technician and determined that the total materials charges for the repair would be $102. Bill estimates that the job will take 5 labor hours to complete. Following is the budgeted cost data for Current Designs: Repair-technician wages Fringe benefits Overhead $51,800 $18,500 $18,500 Current Designs has allocated 3,700 hours of repair time for the upcoming year. The customer has agreed to transport the kayak to the Winona production facility for the repairs. Determine the price that Current Designs would charge to complete the repairs for the customer.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Nn. 110.

As a service to its customers, Current Designs repairs damaged kayaks. This is especially valuable to customers that have made a significant investment in the composite kayaks. To price the repair jobs, Current Designs uses time-and-material pricing with a desired profit margin of $15 per labor hour and a 50% materials loading charge. Recently, Bill Johnson, Vice President of Sales and Marketing, received a phone call from a dealer in Brainerd, Minnesota. The dealer has a customer who recently damaged his composite kayak and would like an estimate of the cost to repair it. After the dealer emailed pictures of the damage, Bill reviewed the pictures with the repair technician and determined that the total materials charges for the repair would be $102. Bill estimates that the job will take 5 labor hours to complete. Following is the budgeted cost data for Current Designs: Repair-technician wages Fringe benefits Overhead Current Designs has allocated 3,700 hours of repair time for the upcoming year. The customer has agreed to transport the kayak to the Winona production facility for the repairs. Determine the price that Current Designs would charge to complete the repairs for the customer. Price $ tA $51,800 $18,500 $18,500
Transcribed Image Text:As a service to its customers, Current Designs repairs damaged kayaks. This is especially valuable to customers that have made a significant investment in the composite kayaks. To price the repair jobs, Current Designs uses time-and-material pricing with a desired profit margin of $15 per labor hour and a 50% materials loading charge. Recently, Bill Johnson, Vice President of Sales and Marketing, received a phone call from a dealer in Brainerd, Minnesota. The dealer has a customer who recently damaged his composite kayak and would like an estimate of the cost to repair it. After the dealer emailed pictures of the damage, Bill reviewed the pictures with the repair technician and determined that the total materials charges for the repair would be $102. Bill estimates that the job will take 5 labor hours to complete. Following is the budgeted cost data for Current Designs: Repair-technician wages Fringe benefits Overhead Current Designs has allocated 3,700 hours of repair time for the upcoming year. The customer has agreed to transport the kayak to the Winona production facility for the repairs. Determine the price that Current Designs would charge to complete the repairs for the customer. Price $ tA $51,800 $18,500 $18,500
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