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Second Chance Welding

Price: $1.99

Second Chance Welding rebuilds spot welders for manufacturers. The following
budgeted cost data for 2014 is available for Second Chance.

  Time Charges Material Loading charges
Technicians' wages and benefits   228,000  -  
Parts manager's salary and benefits   -    42,500
Office employee's salary and benefits   38,000  9,000
Other overhead   15,200  24,000
Total budgeted costs   281,200  75,500

The company desires a $30 profit margin per hour of labor and a 20% profit margin on
parts. It has budgeted for 7,600 hours of repair time in the coming year, and estimates that
the total invoice cost of parts and materials in 2014 will be $400,000.

(a) Compute the rate charged per hour of labor.
(b) Compute the material loading percentage. (Round to three decimal places.)
(c) Pace Corporation has requested an estimate to rebuild its spot welder. Second Chance
estimates that it would require 40 hours of labor and $2,000 of parts. Compute the
total estimated bill.

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