Ralph's Auto Repair uses time and material pricing. The body shop, which anticipates 10,000 direct labor hours of activity, has the following data: Annual overhead costs: Material handling and storage$15,000 Other overhead costs 75,000 Annual cost of materials used 187,500 Labor rate per hour, including fringe benefits 18 Hourly charge to achieve profit margin 11 Assuming there is no profit markup on material cost, the amount to be added to each dollar of material cost to obtain the total material charge is:
A. $0.10.
B. $0.06.
C. $0.08.
D. $0.13.
E. None of the answers is correct.
Answer: C
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A common criticism of the marketing system is that intermediaries ________
A) are too few in number B) mark up prices beyond the value of their services C) provide only essential services D) undervalue their service costs E) are overly protective of manufacturers' interests
Statements of opinion and sales talk do not constitute false and deceptive advertising
Indicate whether the statement is true or false
In the price-setting process, the next step after demand has been evaluated is to
A. choose a price. B. define the pricing objectives. C. evaluate the alternatives. D. analyze the competitive price environment. E. determine the costs.
A Las Vegas theater offers a free performance. There is a two-drink minimum. This is an example of what strategy?
a. value-based pricing b. direct cross subsidies c. multiparty d. utility and usage