Chapter 3, Problem 3.10SE

Calculate job cost and billing at appliance repair service (Learning Objectives 2, 4, & 7 (Appendix))

Selle Appliance provides repair services for all makes and models of home appliances. Selle Appliance charges customers for labor on each job at a rate of $89 per hour. The labor rate is high enough to cover actual technician wages of $27 per hour, to cover shop overhead (allocated at a cost of $14 per hour), and to provide a profit. The company charges the customer “at cost” for parts and materials. A recent customer job consisted of $45 in parts and materials and 8 hours of technician time.

1. 1. What was Selle Appliance’s cost for this job? Include shop overhead in the cost calculation.
2. 2. How much was charged to the customer for this repair job?