Exercise 8-9
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.
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Time Charges |
Material Loading Charges |
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Technicians’ wages and benefits |
$181,720 |
|
– |
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||
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Parts manager’s salary and benefits |
– |
|
$33,670 |
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Office employee’s salary and benefits |
26,804 |
|
5,980 |
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Other overhead |
18,107 |
|
37,050 |
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Total budgeted costs |
$226,631 |
|
$76,700 |
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The company has budgeted for 6,490 hours of technician time during the coming year. It desires a $37.46 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 $650,000.
