Final answer:
The time charge per hour of direct labor for Heng Company is $250, which includes both the labor rate and non-materials-related overhead. The materials markup percentage is 54%, which combines the materials-related overhead with the company's target profit margin.
Step-by-step explanation:
The student asked to determine the time charge per hour of direct labor and the materials markup percentage for Heng Company, which provided the following information: direct labor rate at $220 per direct labor hour (DLH), non-materials-related overhead at $30 per DLH, materials-related overhead at 24% of direct materials costs, and a target profit margin of 30% on both conversion and direct materials costs.
To calculate the time charge per hour of direct labor, we sum up the direct labor rate and the non-materials-related overhead:
- Direct Labor Rate: $220 per DLH
- Non-materials-related Overhead: $30 per DLH
Time Charge per Hour = Direct Labor Rate + Non-materials-related Overhead = $220 + $30 = $250 per DLH.
Materials markup percentage takes into account both the materials-related overhead and the target profit margin. To find the materials markup percentage:
- Materials-Related Overhead: 24%
- Target Profit Margin: 30%
Then, Materials Markup Percentage = Materials-Related Overhead + Target Profit Margin = 24% + 30% = 54%.