1. The time charge per hour of direct labor would be $50.
2. The materials markup per dollar of direct material cost would be 44%.
3. The price for the service and repair offered by AppleCare to the local college would be $100,400.
To compute the time charge per hour of direct labor, we need to consider the direct labor rate and non-materials-related overhead. The total cost per direct labor hour would be:
Direct Labor Rate + Non-materials-related Overhead
= $40 + $10
= $50
Therefore, the time charge per hour of direct labor would be $50.
To compute the materials markup per dollar of direct material cost, we need to consider the materials-related overhead and the target profit margin on both conversion and direct materials. The total markup percentage on direct materials cost would be:
Materials-related Overhead + Target Profit Margin
= 4% + 40%
= 44%
Therefore, the materials markup per dollar of direct material cost would be 44%.
To compute the price for a local college using time and materials pricing, we need to use the estimated direct labor hours and direct materials cost. The total cost for direct labor would be:
Direct Labor Hours x Time Charge per Hour of Direct Labor
= 1,000 x $50
= $50,000
The total cost for direct materials would be:
Direct Materials Cost x (1 + Materials Markup per Dollar of Direct Material Cost)
= $35,000 x (1 + 44%)
= $50,400
The total price for the service and repair offered by AppleCare to the local college would be the sum of the direct labor and direct materials costs, which is:
Total Price = Direct Labor Cost + Direct Materials Cost
= $50,000 + $50,400
= $100,400
Therefore, the price for the service and repair offered by AppleCare to the local college would be $100,400.