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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Textbook Question
Chapter 8, Problem 8.3AP
Sutton’s Electronic Repair Shop has budgeted the following time and material for 2017.
SUTTON’S ELECTRONIC REPAIR SHOP
Budgeted Costs for the Year 2017
| Material | ||
| Time | Loading | |
| Charges | Charges | |
| Shop employees' wages and benefits | $108,000 | — |
| Parts managers salary' and benefits | — | $25,400 |
| Office employee’s salary and benefits | 23,500 | 13,600 |
| 26,000 | 16,000 | |
| Total budgeted costs | $157,500 | $55,000 |
Sutton’s budgets 5,000 hours of repair time in 2017 and will bill a profit of $10 per labor hour along with a 25% profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is $ 100,000.
On January 5, 2017, Sutton’s is asked to submit a price estimate to fix a 72-inch flat-screen TV. Sutton’s estimates that this job will consume 4 hours of labor and $200 in parts.
Instructions
(a) Compute the labor rate for Sutton’s Electronic Repair Shop for the year 2017.
(b) Compute the material loading charge percentage for Sutton’s Electronic Repair Shop for the year 2017.
(c) Prepare a time-and-material price quotation for fixing the flat-screen TV.
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Sutton’s Electronic Repair Shop has budgeted the following time and material for 2020.
SUTTON’S ELECTRONIC REPAIR SHOPBudgeted Costs for the Year 2020
Time Charges
Material Loading Charges
Shop employees’ wages and benefits
$118,800
―
Parts manager’s salary and benefits
―
$25,400
Office employee’s salary and benefits
20,520
13,990
Overhead (supplies, depreciation, advertising, utilities)
28,080
20,200
Total budgeted costs
$167,400
$59,590
Sutton’s budgets 5,400 hours of repair time in 2020 and will bill a profit of $14 per labor hour along with a 21% profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is $101,000.On January 5, 2020, Sutton’s is asked to submit a price estimate to fix a 72-inch flat-screen TV. Sutton’s estimates that this job will consume 9 hours of labor and $300 in parts.
Calculate the time-and-material price quotation for fixing the…
Sutton’s Electronic Repair Shop has budgeted the following time and material for 2020.
SUTTON’S ELECTRONIC REPAIR SHOPBudgeted Costs for the Year 2020
Time Charges
Material Loading Charges
Shop employees’ wages and benefits
$118,800
―
Parts manager’s salary and benefits
―
$25,400
Office employee’s salary and benefits
20,520
13,990
Overhead (supplies, depreciation, advertising, utilities)
28,080
20,200
Total budgeted costs
$167,400
$59,590
Sutton’s budgets 5,400 hours of repair time in 2020 and will bill a profit of $14 per labor hour along with a 21% profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is $101,000.On January 5, 2020, Sutton’s is asked to submit a price estimate to fix a 72-inch flat-screen TV. Sutton’s estimates that this job will consume 9 hours of labor and $300 in parts.
(a)
Compute the labor…
Sutton’s Electronic Repair Shop has budgeted the following time and material for 2020.
SUTTON’S ELECTRONIC REPAIR SHOPBudgeted Costs for the Year 2020
Time Charges
Material Loading Charges
Shop employees’ wages and benefits
$118,800
―
Parts manager’s salary and benefits
―
$25,400
Office employee’s salary and benefits
20,520
13,990
Overhead (supplies, depreciation, advertising, utilities)
28,080
20,200
Total budgeted costs
$167,400
$59,590
Sutton’s budgets 5,400 hours of repair time in 2020 and will bill a profit of $14 per labor hour along with a 21% profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is $101,000.On January 5, 2020, Sutton’s is asked to submit a price estimate to fix a 72-inch flat-screen TV. Sutton’s estimates that this job will consume 9 hours of labor and $300 in parts.
Compute the material loading charge percentage for Sutton’s Electronic…
Chapter 8 Solutions
Managerial Accounting: Tools for Business Decision Making
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