Use the following information for questions
The following data are available for Wheels 'N Spokes Repair Shop for 2020:
$$\begin{array} { l l }
\text { Repair technician's wages } & \$ 150,000 \
\text { Fringe benefits } & 50,000 \
\text { Overhead } & \underline { 80,000 } \
\text { Total } & \underline { \$ 280,000}
\end{array}$$ The desired profit margin is $15 per labour hour.The material loading charge is 35% of invoice cost.It is estimated that 4,000 labour hours will be worked in 2020.
-In January 2020, Wheels 'N Spokes repairs a bicycle that uses parts of $200.Its material loading charge on this repair would be
A)$35.
B)$70.
C)$235.
D)$270.

Question

Use the following information for questions 
The following data are available for Wheels 'N Spokes Repair Shop for 2020:
 $$\begin{array} { l l } 
\text { Repair technician's wages } & \$ 150,000 \
\text { Fringe benefits } & 50,000 \
\text { Overhead } & \underline { 80,000 } \
\text { Total } &  \underline { \$ 280,000}
\end{array}$$ The desired profit margin is $15 per labour hour.The material loading charge is 35% of invoice cost.It is estimated that 4,000 labour hours will be worked in 2020.
-In January 2020, Wheels 'N Spokes repairs a bicycle that uses parts of $200.Its material loading charge on this repair would be
A)$35.
B)$70.
C)$235.
D)$270.

Quizplus · Accepted Answer

The material loading charge is 35% of invoice cost. The parts used in the repair cost $200, so the invoice cost would be $200. 
Material loading charge = 35% of $200 = $70. therefore, the material loading charge on this repair would be $70.

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