The following data is available for Wheels 'N Spokes Repair Shop for 2013: $$\begin{array} { l r }
\text { Repair technicians' wages } & \$ 360,000 \
\text { Fringe benefits } & 80,000 \
\text { Overhead } & 60,000 \
\text { Total } & \$ 500,000
\end{array}$$ The desired profit margin is $40 per labor hour.The material loading charge is 40% of invoice cost.It is estimated that 5,000 labor hours will be worked in 2013.
- In January 2013, Wheels 'N Spokes repairs a bicycle that uses parts of $180.Its material loading charge on this repair would be
A)$72.
B)$108.
C)$180.
D)$252.

Question

The following data is available for Wheels 'N Spokes Repair Shop for 2013: $$\begin{array} { l r } 
\text { Repair technicians' wages } & \$ 360,000 \
\text { Fringe benefits } & 80,000 \
\text { Overhead } & 60,000 \
\text { Total } & \$ 500,000
\end{array}$$ The desired profit margin is $40 per labor hour.The material loading charge is 40% of invoice cost.It is estimated that 5,000 labor hours will be worked in 2013. 
- In January 2013, Wheels 'N Spokes repairs a bicycle that uses parts of $180.Its material loading charge on this repair would be
A)$72.
B)$108.
C)$180.
D)$252.

Quizplus · Accepted Answer

The material loading charge is 40% of the invoice cost. Therefore, for parts costing $180, the material loading charge is 0.40 * $180 = $72.

The Following Data Is Available for Wheels 'N Spokes Repair