Rey Custom Electronics (RCE) sells and installs complete security, computer, audio, and video systems for...
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Rey Custom Electronics (RCE) 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. The company has budgeted for 6,250 hours of technician time during the coming year. It desires a $38 profit margin per hour of labor and an 80% profit on parts. It estimates the total invoice cost of parts and materials in 2020 will be $700,000. a. Compute the rate charged per hour of labor b. Compute the material loading percentage c. RCE has just received a request for a bid from Buil Builders on a $1,200,000 new home. The company estimates that it would require 80 hours of labor and $40,000 of parts. Compute the total estimated bill. Time Charges Material Loading Charges $150,000 $34,000 Technicians' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits Other overhead Total budgeted costs 30,000 15,000 15,000 $195,000 42,000 $91,000
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