Question

Silver Spoon Service repairs commercial food preparation equipment. The following budgeted cost data is available for 2019: Time Charges Material Charges Technicians' wages and benefits $500,000 Parts manager's salary and benefits $72,000 Office manager's salary and benefits 112,000 18,000 Other overhead 48,000 135,000 Total budgeted costs $660,000 $225,000 Silver Spoon has budgeted for 10,000 hours of technician time during the coming year. It desires a $54 profit margin per hour of labor and a 40% profit margin on parts. Silver Spoon estimates the total invoice cost of parts and materials in 2019 will be $500,000. Compute the rate charged per hour of labor.

Answer 1

The rate charged per hour of labor is 120.

Step-by-step explanation:

Rate charged per hour of labor is given by:

= Budgeted cost per labor hour + Profit margin

= 660000/10000 + 54

= 120

Therefore, The rate charged per hour of labor is 120.