Richard's Auto sells and installs automobile alarms. It uses time and materials pricing to set prices. The following budgeted cost data are available:
Materials
Time Loading
Charges Charges
Technician's Wages and Benefits 250,000 0
Manager's Salary and Benefits 0 45,000
Office Employees Salaries and Benefits 39,000 18,000
Other Overhead 7,000 37,000
Total Budgeted Costs 296,000 100,000
The company has budgeted for 5,000 hours of technician time during the coming year. It desires a $54 profit margin per hour of labor and a 120% profit on parts. It estimates the the total invoice cost of parts and materials during the year will be $800,000.
a) Compute the rate charged per hour of labor