A local engineering firm is bidding on a design project for a new client. The total budgeted direct-labor costs for the firm are $600,000. The net budgeted indirect costs are $800,000. It is estimated that there
are 10,000 billable hours in total.
Required:
a. Find the budgeted direct-labor cost rate?
b. Find the budgeted indirect-cost rate assuming direct-labor cost is allocation base?
c. Evaluate what should be the engineering firm bid on the project if the direct labor hours are estimated at 300 hours?