Question

Work the following pricing problems for services rendered. (For all calculations use hundredths.)

Labor time = 4 1/2 hours
Overhead rate = 95%
Retail price of parts = $134.75
Total cost of job = $241.98
Hourly rate?

Answer 1

Answer:

Hourly Rate = $12.22 per hour

Step-by-step explanation:

$\text{Labor Time = }4\tfrac{1}{2}=4.5\thinspace{ hours}$

Overhead Rate = 95%

Retail price of parts = $134.75

Total cost of job = $241.98

Cost of labor = Total cost - Retail price

                      = 241.98 - 134.75

                      = $107.23

Now, labor works for 4.5 hours and ears a total amount of $107.23

$\implies\text{Amount earned in one hour or hourly rate = }\frac{107.23}{4.5}\\\\\implies \text{Hourly rate = }\ 23.83\text{ per hour}$

Now, Labor will get 95% overhead rate

⇒ The labor is getting 100% already but an overhead of 95% is also given

$\text{So, Hourly Rate = }\frac{23.83}{1+0.95}\\\\\bf\implies\textbf{Hourly Rate = }\ 12.22\textbf{ per hour}$