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Hannon company | Accounting homework help

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.



Time Charges


Material Loading Charges


Technicians’ wages and benefits







Parts manager’s salary and benefits







Office employee’s salary and benefits







Other overhead 







Total budgeted costs







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.

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