Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Chapter 8, Problem 8.10E
Wasson’s Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are as follows.
| Time Charges | Material Loading Charges | |
| Restorers’ wages and |
$270,000 | |
| Purchasing agent’s salary and fringe benefits | $ 67,500 | |
| Administrative salaries and fringe benefits | 54,000 | 21,960 |
| Other |
24,000 | 77,490 |
| Total budgeted costs | $348,000 | $166,950 |
The company anticipated that the restorers would work a total of 12,000 hours this year. Expected parts and materials were $1,260,000.
In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant remembers that the hourly labor rate was $70,00 and that the material loading charge was 83,25%.
Instructions
(a) Determine the profit margin per hour on labor.
(b) Determine the profit margin on materials.
(c) Determine the total price of labor and materials on a job that was completed after the fire that required 150 hours of labor and $60,000 in parts and materials.
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Taylor’s Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are:
Material
Time
Loading
Charges
Charges
Restorers’ wages and fringe benefits
$270,000
Puchasing agent’s salary and fringe benefits
$ 67,500
Administrative salaries and fringe benefits
60,000
22,500
Other overhead costs
20,000
75,600
Total budgeted costs
$350,000
$165,600
The company anticipated that the restorers would work a total of 10,000 hours this year. Expected parts and materials were $1,200,000.
In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant remembers that the hourly labor rate was $60 and that the material loading charge was 83.80%.
Instructions
Determine the profit margin per hour on labor.
Determine the profit margin on materials.
Determine the total price of labor and materials on a job that was completed after…
Wasson's Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are as follows.
Restorers' wages and fringe benefits
Purchasing agent's salary and fringe benefits
Administrative salaries and fringe benefits
Other overhead costs
Total budgeted costs
(a)
Time
Charges
$200,000
40,000
10,000
$250,000
Profit margin on labor $
The company anticipated that the restorers would work a total of 10,000 hours this year. Expected parts and materials were
$1,200,000
Material
Loading
Charges
In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant
remembers that the hourly labor rate was $68 and that the material loading charge was 82%.
$64,000
20,000
72,000
$156,000
Determine the profit margin per hour on labor. (Round intermediate calculations to 2 decimal places, eg. 10.25 and final answer to O
decimal places, e.g. 10)
per hour
Wildhorse's Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are as follows:
Restorers' wages and benefits
Purchasing agent's salary and benefits
Administrative salaries and benefits
Other overhead costs
Total budgeted costs
Time Charges Material Loading Charges
(a1)
$329,400
73,200
24,400
Profit margin
$427,000
$82,350
27,450
219,240
The company anticipated that the restorers would work a total of 10,000 hours this year. Expected parts and materials were
$1,200,000.
$329,040
In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant
remembers that the hourly labor rate was $60.00 and that the material loading charge was 83.80%.
Determine the profit margin per hour on labor. (Round answer to 2 decimal places, e.g. 15.25.)
Chapter 8 Solutions
Managerial Accounting: Tools for Business Decision Making
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