Parts manager's salary and benefits $29,920 Office employee's salary and benefits 33,000 13,200 Other overhead 16,500 36,960 Total budgeted costs $181,500 $80,080 The company has budgeted for 5,500 hours of technician time during the coming year. It desires a $38 profit margin per hour of labor and an 80% profit on parts. It estimates the total invoice cost of parts and materials in 2022 will be $616,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question
Cheyenne Custom Electronics (RCE) 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
$132,000
Parts manager's salary and benefits
$29,920
Office employee's salary and benefits
33,000
13,200
Other overhead
16,500
36,960
Total budgeted costs
$181,500
$80,080
The company has budgeted for 5,500 hours of technician time during the coming year. It desires a $38 profit
margin per hour of labor and an 80% profit on parts. It estimates the total invoice cost of parts and materials in
2022 will be $616,000.
(a)
Your answer is correct.
Compute the rate charged per hour of labor. (Round answer to 2 decimal places, e.g. 10.50.)
Labor rate
%24
71
per hour
(b)
Your answer is correct.
Compute the material loading percentage.
Material loading percentage
93
eTextbook and Media
Attempts: 1 of 5 used
(c)
RCE has just received a request for a bid on a security and home entertainment system from Buil Builders
on a $1,056,000 new home. The company estimates that the job would require 80 hours of labor and
$35,200 of parts. Compute the total estimated bill.
Total estimated bill
%24
$
Transcribed Image Text:Cheyenne Custom Electronics (RCE) 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 $132,000 Parts manager's salary and benefits $29,920 Office employee's salary and benefits 33,000 13,200 Other overhead 16,500 36,960 Total budgeted costs $181,500 $80,080 The company has budgeted for 5,500 hours of technician time during the coming year. It desires a $38 profit margin per hour of labor and an 80% profit on parts. It estimates the total invoice cost of parts and materials in 2022 will be $616,000. (a) Your answer is correct. Compute the rate charged per hour of labor. (Round answer to 2 decimal places, e.g. 10.50.) Labor rate %24 71 per hour (b) Your answer is correct. Compute the material loading percentage. Material loading percentage 93 eTextbook and Media Attempts: 1 of 5 used (c) RCE has just received a request for a bid on a security and home entertainment system from Buil Builders on a $1,056,000 new home. The company estimates that the job would require 80 hours of labor and $35,200 of parts. Compute the total estimated bill. Total estimated bill %24 $
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