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Fred Burgess Diesel Service, Inc. repairs commercial diesel generators used to power heavy equipment and...

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Accounting

Fred Burgess Diesel Service, Inc. repairs commercial diesel generators used to power heavy equipment and locomotive motors for the BNSF Railway. The following budgeted cost data is available for 2021: Time Material Charges Charges Technicians wages and benefits $610,000 Parts managers salary and benefits $ 90,000 Office managers salary and benefits 72,000 18,000 Other overhead 38,000 105,000 Total budgeted costs $720,000 $213,000

The company has budgeted for 8,000 hours of technician time during the coming year. It desires a $75 profit margin per hour of labor and a 45% profit margin on parts. It is estimated the total invoice cost of parts and materials in 2021 will be $1,200,000.

Required: 1. Compute the rate charged per hour of labor. 2. Compute the material loading charge. 3. Fred has received a request from BNSF Railway for an estimate to repair a diesel generator for their Roseville Locomotive #459. Fred estimates that it would take 24 hours of labor and $10,300 of parts. Compute the total estimated bill.

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