solution

Karl’s Klassic Kars restores classic automobiles to showroom status. Budgeted data for the current year are as follows:

Use time-and-material pricing to determine bill.

The company anticipated that the restorers would work a total of 12,000 hours this year and expected that parts and materials would cost $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 labour rate was $70.00 and that the material loading charge was 83.25%.

Instructions

a. Determine the profit margin per hour on labour.

b. Determine the profit margin on materials.

c. Determine the total price of labour and materials on a job that was completed after the fire that required 150 hours of labour and $60,000 in parts and materials.