Question

Meng uses time and materials pricing. Its time charge per hour of direct labor is $66. Its materials markup is 35%.

What price should Meng quote for a job that will take 60 direct labor hours and use $3,000 of direct materials?

Answer 1

To calculate Meng's quote for the job, multiply the labor hours (60) by the hourly rate ($66) to get $3,960 for labor. The materials cost plus markup is found by calculating 35% of $3,000 ($1,050) and adding it to the base materials cost to get $4,050. The total quote would be the sum of both, which is $8,010.

Step-by-step explanation:

The student asked for the price Meng should quote for a job that requires 60 direct labor hours and uses $3,000 of direct materials when Meng uses time and materials pricing with a time charge of $66 per hour and a materials markup of 35%.

To calculate the total cost of labor, we multiply the number of labor hours by the cost per hour:

• 60 hours x $66/hour = $3,960

To calculate the cost of materials with markup, we first find the markup amount, then add it to the cost of materials:

• 35% of $3,000 = 0.35 x $3,000 = $1,050
• $3,000 + $1,050 = $4,050

Finally, we combine the total cost of labor and the cost of materials with markup to get the quote:

• $3,960 (labor) + $4,050 (materials) = $8,010

Meng should quote a price of $8,010 for this job.