You must give an estimate to service an automobile. The hourly rate for labor is $7.50. You estimate the job will take 2 1/2 hours. The overhead rate at your shop is 85%. You also figure that parts to be used total $25.50 retail. How much is the job estimate (to the nearest cent)? Estimate of total cost =
Accepted Solution
A:
Answer: job estimate = $60.1875
Explanation: 1- labor payment: The hourly rate is $7.5 and the job will take around 2.5 hours. This means that: labor payment = 7.2 * 2.5 = $18.75
2- Overhead value: The overhead value is 85%. This means that: its cost would be = 85% * labor payment = 0.85 * 18.75 = $15.9375
3- Retail cost: We are given that the retail cost is $25.5