Question - Waterways uses time and material pricing when it bids on irrigation projects. Budgeted data for 2016 are as follows.
WATERWAYS CORPORATION Budgeted Costs for Irrigation Projects for 2016
Time Charges Material Loading
Charges Labor wages (5,750 hours) $240,000
Supervisor's salary $ 60,000
Clerical and accountant wages 60,000 4,000
Irrigation supplies manager 40,000
Overhead 53,950 21,000
Total $353,950 $125,000
Waterways has budgeted for 5,750 labor hours. It desires a $14 profit margin per hour of labor and 16% profit on materials. It estimates the total invoice cost of materials in 2016 will be $640,000.
Waterways has received a request for a bid to do a parkway for the city. The irrigation manager estimates that it will take about a month to complete the project and require 480 hours of labor and $80,000 of materials. Compute the total estimated bid for the parkway project.