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Voltage Electrical, Which Installs Sophisticated Electronic-Control Systems in New Homes

Question 84

Essay

Voltage Electrical, which installs sophisticated electronic-control systems in new homes, prices jobs by using the time-and-materials method. The following data apply to a job for LMB Builders:
Labor hours: 180
Materials cost: $48,000
The following predictions, based on 30,000 direct labor hours, pertain to the company's operations for the year:  Annual overhead costs:  Material handling and storage $40,000 Other overhead costs 360,000 Annual cost of materials used 500,000 Labor rate per hour, including fringe benefits 34\begin{array}{l}\text { Annual overhead costs: }\\\begin{array}{lr}\text { Material handling and storage } & \$ 40,000 \\\text { Other overhead costs } & 360,000 \\\text { Annual cost of materials used } & 500,000 \\\text { Labor rate per hour, including fringe benefits } & 34\end{array}\end{array}
Voltage Electrical adds a markup of $15 per hour on its time charges, but there is no profit markup on material costs.
Required:
Calculate the price for the LMB Builders' job.

Correct Answer:

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Time charges: $34 + ($360,000 ...

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