HH Auto Repair reports the following information for the coming year. Direct labor rate, including fringe benefits . $36 per DLH Annual direct labor hours 10,000 hours Annual direct materials (parts) purchases $2,000,000 Annual overhead costs: Materials purchasing, handling, and storage $360,000 Non-materials related overhead (depreciation, insurance, taxes, rent) . $170,000 Target profit margin (on both labor and materials) 32% 1. Compute the rate per hour of direct labor (in $). 2. Compute the materials markup (in %). 3. What price should the company quote for a job requiring four direct labor hours and $580 in parts?

HH Auto Repair reports the following information for the coming year. Direct labor rate, including fringe benefits . $36 per DLH Annual direct labor hours 10,000 hours Annual direct materials (parts) purchases $2,000,000 Annual overhead costs: Materials purchasing, handling, and storage $360,000 Non-materials related overhead (depreciation, insurance, taxes, rent) . $170,000 Target profit margin (on both labor and materials) 32% 1. Compute the rate per hour of direct labor (in $). 2. Compute the materials markup (in %). 3. What price should the company quote for a job requiring four direct labor hours and $580 in parts?

Name: HH Auto Repair reports the following information for the coming year.
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Description: HH Auto Repair reports the following information for the coming year. Direct labor rate, including fringe benefits . $36 per DLH Annual direct labor hours 10,000 hours Annual direct materials (parts) purchases $2,000,000 Annual overhead costs: Materi

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1PB: A company sells mulch by the cubic yard. Grade A much sells for $150 per cubic yard and has variable...

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HH Auto Repair reports the following information for the coming year. $ Labor rate, including fringe benefits Annual labor hours 55 per labor hour 11,900 hours $2,190,000 Annual materials (parts) purchases Annual overhead costs: Materials purchasing, handling, and storage $ 394,200 Other overhead (depreciation, insurance, taxes, rent) Target profit margin (on both labor and materials) $ 178,500 32 % 1. Compute the price (rate) per hour of direct labor. (Round your answer to 2 decimal places.) 2. Compute the materials markup (in %). 3. What price should the company quote for a job requiring four labor hours and $770 in parts? (Round your answer to 2 places.) 1. Total labor rate per hour 2. Materials markup % 3. Total price quote
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