Taylor’s Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are: Material Time Loading Charges Charges Restorers’ wages and fringe benefits $270,000 Puchasing agent’s salary and fringe benefits $ 67,500 Administrative salaries and fringe benefits 60,000 22,500 Other overhead costs 20,000 75,600 Total budgeted costs $350,000 $165,600 The company anticipated that the restorers would work a total of 10,000 hours this year. Expected parts and materials were $1,200,000. In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant remembers that the hourly labor rate was $60 and that the material loading charge was 83.80%. Instructions Determine the profit margin per hour on labor. Determine the profit margin on materials. Determine the total price of labor and materials on a job that was completed after the fire that required 150 hours of labor and $60,000 in parts and materials.
Taylor’s Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are: Material Time Loading Charges Charges Restorers’ wages and fringe benefits $270,000 Puchasing agent’s salary and fringe benefits $ 67,500 Administrative salaries and fringe benefits 60,000 22,500 Other overhead costs 20,000 75,600 Total budgeted costs $350,000 $165,600 The company anticipated that the restorers would work a total of 10,000 hours this year. Expected parts and materials were $1,200,000. In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant remembers that the hourly labor rate was $60 and that the material loading charge was 83.80%. Instructions Determine the profit margin per hour on labor. Determine the profit margin on materials. Determine the total price of labor and materials on a job that was completed after the fire that required 150 hours of labor and $60,000 in parts and materials.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Taylor’s Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are:
Material
|
|
Time |
Loading |
|
|
Charges |
Charges |
|
Restorers’ wages and |
$270,000 |
|
|
Puchasing agent’s salary and fringe benefits |
|
$ 67,500 |
|
Administrative salaries and fringe benefits |
60,000 |
22,500 |
|
Other |
20,000 |
75,600 |
|
Total budgeted costs |
$350,000 |
$165,600 |
The company anticipated that the restorers would work a total of 10,000 hours this year. Expected parts and materials were $1,200,000.
In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant remembers that the hourly labor rate was $60 and that the material loading charge was 83.80%.
Instructions
- Determine the profit margin per hour on labor.
- Determine the profit margin on materials.
- Determine the total price of labor and materials on a job that was completed after the fire that required 150 hours of labor and $60,000 in parts and materials.
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