Question

Second Chance Welding rebuilds spot welders for manufacturers. The following budgeted cost data for 2017 is available for Second Chance.TimeCharges MaterialLoadingCharges Technicians' wages and benefits $189,800 - Parts manager's salary and benefits - $40,500 Office employee's salary and benefits 36,500 9,950 Other overhead 14,600 24,840 Total budgeted costs $240,900 $75,290 The company desires a $36.00 profit margin per hour of labor and a 29.00% profit margin on parts. It has budgeted for 7,300 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2017 will be $414,000.Second Chance Welding rebuilds spot welders for maCompute the rate charged per hour of labor. (Round answer to 2 decimal places, e.g. 10.50.)Compute the material loading percentage. (Round answer to 3 decimal places, e.g. 10.501.)Pace Corporation has requested an estimate to rebuild its spot welder. Second Chance estimates that it would require 44 hours of labor and $2,100 of parts. Compute the total estimated bill. (Round answer to 2 decimal places, e.g. 10.50.)

Answer 1

a. $ 69 Per Hour of Labor.

b. Total Material Loading Percentage 47.186 %

c. Calculation of Total estimated bill $ 6126.91

Step-by-step explanation:

a) Calculation of rate charged per hour of labor :-

=[ Total Budgeted Costs (Time Charges) / Number of Hours + Profit margin ]

= [ 240900 / 7300 + 36]

= 33 + 36

= $ 69 Per Hour of Labor.

b) Calculation of Material Loading percentage:-

= (40500 + 9950 + 24840) / 414000

= 75290 / 414000

= 0.18186 i.e., 18.186 % (approx)

Total Material Loading Percentage: = 18.186 + 29 = 47.186 %

c) Calculation of Total estimated bill:-

= (69 * 44) + 2100 +(47.186 % of 2100)

= 3036 + 2100 + 990.91 (approx)

= $ 6126.91 (approx)

Conclusion:-

Rate charged per hour of labor $ 69 Per Hour of Labor

Material loading percentage 47.186 %

Total estimated bill $ 6126.91