Acc 346 Managerial Accounting P8-3A [Acc346 Managerial Accounting P8-3A ]


Acc/346 Managerial Accounting


Exercise – 3


Hawks Electronic Repair Shop has budgeted the following time and material for 2008.



Budgeted Costs for the Year 2008

Time Charges              Material Loading Charges

Shop employees’ wages and benefits             $108,000                                 —

Parts manager’s salary and benefits                —                                            $25,400

Office employee’s salary and benefits              20,000                                   13,600

Overhead (supplies, depreciation, advertising, utilities 26,000                      18,000


Total budgeted costs                                       $154,000                                 $57,000


Hawks budgets 5,000 hours of repair time in 2008 and will bill a profit of $5 per labor hour along with a 30% profit markup on the invoice cost of parts. The estimated invoice cost for parts to be used is $100,000.

On January 5, 2008 Hawks is asked to submit a price estimate to fix a 72-inch big-screen TV. Hawks estimates that this job will consume 20 hours of labor and $500 in parts.



(a) Compute the labor rate for Hawks Electronic Repair Shop for the year 2008.

·         (b) Compute the material loading charge percentage for Hawks Electronic Repair Shop for the year 2008.

·         (c) Prepare a time-and-material price quotation for fixing the big-screen TV.


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