Question

Work the following pricing problems for services rendered. (Round to tenths.)

Labor rate = $8.00 per hour
Labor time = 6 hours
Retail price of parts = $0
Total job cost = $86.00
Overhead rate?

Answer 1

55.8

Explanation:

8x6= 48

48/86 into percent= 55.814%

therefore it would be rounded to 55.8

Answer 2

Overhead rate = $6.3

Explanation:

Given : Labor rate = $8.00 per hour

Labor time = 6 hours

Retail price of parts = $0

Total job cost = $86.00

To find : Overhead rate

Solution:

Overhead cost = Total Cost - The cost of all inputs

The Overhead Rate is this number divided by total labor hours.

Total job cost = $86.00

Labor Cost = labor rate × labor time = 8 × 6 = $48

Retail price of parts:$0

Overhead Costs = total cost - labor cost= $86 - $48 = $38

Now, we divided overhead cost by labor hours to get overhead rate,

Overhead Rate
`=(38)/(6)=6.33`

Therefore, Overhead rate is $6.3