Concept explainers
Wasson’s Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are as follows.
Time Charges | Material Loading Charges | |
Restorers’ wages and |
$270,000 | |
Purchasing agent’s salary and fringe benefits | $ 67,500 | |
Administrative salaries and fringe benefits | 54,000 | 21,960 |
Other |
24,000 | 77,490 |
Total budgeted costs | $348,000 | $166,950 |
The company anticipated that the restorers would work a total of 12,000 hours this year. Expected parts and materials were $1,260,000.
In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant remembers that the hourly labor rate was $70,00 and that the material loading charge was 83,25%.
Instructions
(a) Determine the profit margin per hour on labor.
(b) Determine the profit margin on materials.
(c) Determine the total price of labor and materials on a job that was completed after the fire that required 150 hours of labor and $60,000 in parts and materials.
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