a2 As a service to its customers, Current Designs repairs damaged kayaks. This is especially valuable to customers that have made asignificant investment in the composite kayaks. To price the repair jobs, Current Designs uses time-and-material pricing with a desiredprofit margin of $22 per labor hour and a 50% materials loading charge.Recently, Bill Johnson, Vice President of Sales and Marketing, received a phone call from a dealer in Brainerd, Minnesota. The dealerhas a customer who recently damaged his composite kayak and would like an estimate of the cost to repair it. After the dealer emailedpictures of the damage, Bill reviewed the pictures with the repair technician and determined that the total materials charges for therepair would be $86. Bill estimates that the job will take 4 labor hours to complete.Following is the budgeted cost data for Current Designs:Repair-technician wages$35,000Fringe benefitsOverhead$12,500$12,500Current Designs has allocated 2,500 hours of repair time for the upcoming year. The customer has agreed to transport the kayak tothe Winona production facility for the repairs.Determine the price that Current Designs would charge to complete the repairs for the customer.Price

Wages: $35,000Fringe benefits: $12,500Overhead: $12,500Total annual labor cost: $35,000 + $12,500 +…

Answered: As a service to its customers, Current…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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