Town and Country Auto Repair uses time and material pricing. The Body Shop has the following cost data.
Determine the amount needed to be added to each dollar of material cost to obtain the material charge.

Question

Town and Country Auto Repair uses time and material pricing. The Body Shop has the following cost data. 
Determine the amount needed to be added to each dollar of material cost to obtain the material charge.

Quizplus · Accepted Answer

To determine the material charge, we need to add the markup to the material cost. Using the data provided, we can calculate the markup as follows:

Markup = ($84,480 ÷ $352,000) = 0.24 or 24%

Therefore, for every dollar of material cost, we need to add 24 cents.

Material Charge = Material Cost + Markup

Material Charge = Material Cost + (0.24 × Material Cost)

Material Charge = 1.24 × Material Cost

So, to obtain the material charge, we need to add $0.24 to each dollar of material cost. Therefore, the answer is B, $0.08.

Town and Country Auto Repair Uses Time and Material Pricing