Concept explainers
Concept introduction:
Time and Materials Pricing:
Time and materials pricing can be applied in service industry for a service contract wherein materials are supplied along with such contract. Thus, the price is charged for actual materials consumed and labor hours worked during such service contract.
Requirement 1:
To compute the amount to be charged per hour of direct labor, considering a target profit margin of 32% for the company.
Concept introduction:
Time and Materials Pricing:
Time and materials pricing can be applied in service industry for a service contract wherein materials are supplied along with such contract. Thus, the price is charged for actual materials consumed and labor hours worked during such service contract.
Requirement 2:
To compute the materials markup in percentage of the total cost for the company.
Concept introduction:
Time and Materials Pricing:
Time and materials pricing can be applied in service industry for a service contract wherein materials are supplied along with such contract. Thus, the price is charged for actual materials consumed and labor hours worked during such service contract.
Requirement 3:
To compute the amount to be quoted for a job requiring four direct labor hours and $580 in materials parts.
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