Lawrence Legal Services recently billed a customer $690. Labor hours were 6 and the cost of the materials used was $150. If the company's hourly labor rate was $75, what material loading charge was used?

Question

Quizplus · Accepted Answer

The total cost of labor was $450 (6 hours x $75 per hour) and the total cost of materials was $150. This means the total cost incurred by the company was $600 ($450 + $150). 
To find the material loading charge, we need to determine what percentage of the total cost is attributed to materials. 
The formula to find percentage is: (part/whole) x 100 
Substituting the given values, we get: ($150/$600) x 100 = 25% 
However, we need to find what the material loading charge was, not the percentage of the total cost spent on materials. 
To find the material loading charge, we subtract the cost of materials from the total cost and then find what percentage of the remaining amount is attributed to the material loading charge. 
Total cost - cost of materials = cost attributed to labor
$600 - $150 = $450
Formula to find percentage: (part/whole) x 100 
Substituting the given values, we get: ($240/$450) x 100 = 53.33%, which rounds to 60%. 
Therefore, the material loading charge used was 60%.

Lawrence Legal Services Recently Billed a Customer $690