Padong Remanufacturing rebuilds spot welders for manufacturers.

E11-8 Padong Remanufacturing rebuilds spot welders for manufacturers. The following budgeted cost data for 2006 is available for Padong.
                                                 Time Charges - Material Loading Charges
Technicians' wages and benefits           $228,000 -   ----
Parts manager's salary and benefits -           ---- - $42,500
Office employee's salary and benefits      38,000 -  9,000
Other overhead                                     15,200 - 24,000
Total budgeted costs                          $281,200 - $75,500

The company desires a $35 profit margin per hour of labor and a 25% profit margin on parts. It has budgeted for 7,600 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2006 will be $400,000.

Instructions:
1. Compute the rate charged per hour of labor.

2. Compute the material loading percentage. (Round to three decimal places.)

3. Lindy Corporation has requested an estimate to rebuild its spot welder. Padong estimates that it would require 40 hours of labor and $2,500 of parts. Compute the total estimated bill. 

TUTORIAL PREVIEW

Computation of rate charged per hour of labor

	Calculation (Total cost/ Total hours)	Rate per Hour
Technician’s wages and benefits	228,000/ 7,600	30
Office employee’s salary and benefits	38,000/ 7,600	5
Other overhead	15,200/ 7,600	2

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