Calculate the company's time charges and the material charges percentage. 2. Compute the price for the job 3. What would be the price of the job if Perbanas also added a markup of 5 % on all material charges (including material handling and storage costs)
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
PERBANAS, Inc. installs heating systems in new homes built in the southern tier counties of New York state. Jobs are priced using the time and materials method. The president of PERBANAS, Fenturini, is pricing a job involving the heating systems for six houses to be built by a local developer. He has made the following estimates.
Material cost $ 30,000
Labor hours 200
The following predictions pertain to the company’s operations for the next year.
Labor rate, including
Annual labor hours 6,000 hours
Annual
Material handling and storage $ 12,500
Other overhead costs $ 54,000
Annual cost of materials used $ 125,000
Perbanas adds a markup of $ 2 per hour on its time charges, but there is no markup on material costs.
Required:
1. Calculate the company's time charges and the material charges percentage.
2. Compute the price for the job
3. What would be the price of the job if Perbanas also added a markup of 5 % on all material charges (including material handling and storage costs)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
