Q.2 Pasadena 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.
Material
Time
Loading
Charges
Charges
Technicians' wages and benefits
Parts manager's salary and benefits
Office employee's salary and benefits
Other overhead
Total budgeted costs
$150,000
$30,000
30,000
13,400
15,000
31,000
$195,000
$74,400
The company has budgeted for 6,000 hours of technician time during the coming year. It
desires a $30 profit margin per hour of labor and a 80% profit on parts. It estimates the
total invoice cost of parts and materials in 2025 will be $620,000.
<Required>
1. Compute the rate charged per hour of labor. (Round to two decimal places.)
2. Compute the material loading percentage. (Round to two decimal places.)
3. Pasadena has just received a request for a bid from Brock Casey on a $1,200,000 new
1
HW#7
home. The company estimates that it would require 80 hours of labor and $40,000 of
parts. Compute the total estimated bill.