Solution-Compute the labor rate for armstrong bike repair

Compute the labor rate for armstrong bike repair shop

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Reference no: EM13888833

Armstrong Bike Repair Shop has budgeted the following time and material for 2014.

Armstrong Bike Repair Shop Budgeted Costs for the Year 2014
Material	Time Charges	Loading Charges
Shop employees' wages and benefits Parts supervisor's salary and benefits	$36,000	$20,000
Office employee's salary and benefits	15,000	10,000
Overhead (supplies, depreciation, advertising, utilities)	19,000	15,000
Total budgeted costs	$70,000	$45,000

Armstrong budgets 2,500 hours of repair time in 2014 and will bill a profit of $5 per labor hour along with a 15% profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is $75,000.

On January 5, 2014, Armstrong is asked to submit a price estimate to fix a Superior Mountain bike. Armstrong estimates that this job will consume 4 hours of labor and $200 in parts.

Instructions

(a) Compute the labor rate for Armstrong Bike Repair Shop for the year 2014.

(b) Compute the material loading charge percentage for Armstrong Bike Repair Shop for the year 2014.

Reference no: EM13888833

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Compute the labor rate for armstrong bike repair shop

Reference no: EM13888833

Reference no: EM13888833

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