Alarm Source Inc., which installs security alarm systems in new homes, prices jobs by using the time-and-materials method. The following data apply to a job for Treadwell Homes Builders: labour hours 206; material's cost $56,000.
The following predictions, based on 20,000 direct labour hours, pertain to the company's operations for the year: $\begin{array}{l}
\text { Annual overhead costs: }\
\begin{array} { l r }
\text { Material handling and storage } & \$ 50,000 \
\text { Other overhead costs } & 420,000 \
\text { Annual cost of materials used } & 500,000 \
\text { Labour rate per hour, including fringe benefits } & 38
\end{array}
\end{array}$ Alarm Source Inc. adds a markup of $12 per hour on its time charges, but there is no profit markup on material costs.
Required:
Calculate the price for the Treadwell Homes Builders job.

Question

Alarm Source Inc., which installs security alarm systems in new homes, prices jobs by using the time-and-materials method. The following data apply to a job for Treadwell Homes Builders: labour hours 206; material's cost $56,000.
The following predictions, based on 20,000 direct labour hours, pertain to the company's operations for the year: $\begin{array}{l}
\text { Annual overhead costs: }\
\begin{array} { l r } 
\text { Material handling and storage } & \$ 50,000 \
\text { Other overhead costs } & 420,000 \
\text { Annual cost of materials used } & 500,000 \
\text { Labour rate per hour, including fringe benefits } & 38
\end{array}
\end{array}$ Alarm Source Inc. adds a markup of $12 per hour on its time charges, but there is no profit markup on material costs.
Required:
Calculate the price for the Treadwell Homes Builders job.

Quizplus · Accepted Answer

The Answer of Alarm Source Inc., which installs security alarm systems in new homes, prices jobs by using the time-and-materials method. The following data apply to a job for Treadwell Homes Builders: labour hours 206; material's cost $56,000.
The following predictions, based on 20,000 direct labour hours, pertain to the company's operations for the year: $\begin{array}{l}
\text { Annual overhead costs: }\
\begin{array} { l r } 
\text { Material handling and storage } & \$ 50,000 \
\text { Other overhead costs } & 420,000 \
\text { Annual cost of materials used } & 500,000 \
\text { Labour rate per hour, including fringe benefits } & 38
\end{array}
\end{array}$ Alarm Source Inc. adds a markup of $12 per hour on its time charges, but there is no profit markup on material costs.
Required:
Calculate the price for the Treadwell Homes Builders job.

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