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Ignatenko

Price: $1.99


Ignatenko’s Custom Electronics (ICE) sells and installs complete security, computer,
audio, and video systems for homes. On newly constructed homes it provides bids using
time-and-material pricing. The following budgeted cost data are available.

Time Charges Material Loading charges
Technicians' wages and benefits   150,000  -  
Parts manager's salary and benefits   -    34,000
Office employee's salary and benefits   28,000  15,000
Other overhead   15,000  42,000
Total budgeted costs   193,000  91,000

The company has budgeted for 6,250 hours of technician time during the coming year. It
desires a $38 profit margin per hour of labor and a 100% profit on parts. It estimates the
total invoice cost of parts and materials in 2014 will be $700,000.

Instructions
(a) Compute the rate charged per hour of labor. (Round to two decimal places.)
(b) Compute the material loading percentage. (Round to two decimal places.)
(c) ICE has just received a request for a bid from Buil Builders on a $1,200,000 new home.
The company estimates that it would require 80 hours of labor and $40,000 of parts.
Compute the total estimated bill.

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