Time and Materials Pricing
E 9. Cruz’s Home Remodeling Service specializes in refurbishing older homes. Last week Cruz was asked to bid on a remodeling job for the town’s mayor. His list of materials and labor needed to complete the job is as follows:
|
Materials |
Labor |
||
|
Lumber |
$ 6,500 |
Carpenter |
$2,000 |
|
Nails/bolts |
160 |
Floor specialist |
1,300 |
|
Paint |
1,420 |
Painter |
1,500 |
|
Glass |
2,890 |
Supervisor |
1,420 |
|
Doors |
730 |
Helpers |
1,680 |
|
Hardware |
600 |
Total |
$7,900 |
|
Supplies |
400 |
||
|
Total |
$12,700 |
||
The company uses an overhead markup percentage for materials (60 percent) and for labor (40 percent). Those markups cover all operating costs. In addition, Cruz expects to make at least a 25 percent profit on all jobs. Compute the price that Cruz should quote for the mayor’s job.