elle Appliance provides repair services for all makes and models of home appliances. Selle Appliance charges customers for labor on each job at a rate of $89 per hour. The labor rate is high enough to cover actual technician wages of $27 per hour, to cover shop overhead (allocated at a cost of $14 per hour), and to provide a profit. The company charges the customer "at cost" for parts and materials. A recent customer job consisted of $45 in parts and materials and 8 hours of technician time. a. What was Selle Appliance's cost for this job? Include shop overhead in the cost calculation. b. How much was charged to the customer for this repair job?

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Business

8 May, 16:16

elle Appliance provides repair services for all makes and models of home appliances. Selle Appliance charges customers for labor on each job at a rate of $89 per hour. The labor rate is high enough to cover actual technician wages of $27 per hour, to cover shop overhead (allocated at a cost of $14 per hour), and to provide a profit. The company charges the customer "at cost" for parts and materials. A recent customer job consisted of $45 in parts and materials and 8 hours of technician time. a. What was Selle Appliance's cost for this job? Include shop overhead in the cost calculation. b. How much was charged to the customer for this repair job?

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Answers (1)

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Sammy Ferrell · Answer 1

Total cost = $373

Job selling price = $757

Explanation:

Giving the following information:

Selle Appliance charges customers for labor on each job at a rate of $89 per hour.

Direct labor hour = $27

Overhead rate = $14 per direct labor hour

A recent customer job consisted of $45 in parts and materials and 8 hours of technician time.

1) Total cost = direct material + direct labor + allocated overhead

Total cost = 45 + 8*27 + 14*8 = $373

2) Job selling price = direct labor hour required*89 + direct material used

Job selling price = 8*89 + 45 = $757