On January 5, 2008 Hawks is asked to submit a price estimate to fix a 72-inch big-screen TV. Hawks estimates that this job will consume 20 hours of labor and $500 in parts. Compute the labor rate for Hawks Electronic Repair Shop for the year 2008.

Acc 346 managerial accounting p8-3a [acc346 managerial

In order to calculate the labor rate for Hawks Electronic Repair Shop in 2008, we need to first determine the total amount of labor cost for the year. This can be done by multiplying the estimated 20 hours of labor needed to fix a 72-inch big-screen TV by 52 weeks in a year (assuming repairs are performed on a weekly basis). This will give us an annual labor cost of 1,040 hours.

Next, we need to divide this annual labor cost by the total number of hours worked during that same period. For example, if there were 2 technicians working 40 hours per week each over the course of 52 weeks then there would be 3,360 hours worked in total (2 x 40 x 52 = 3,360).

To arrive at our final answer we will take 1,040 and divide it by 3,360 which gives us 0.31 or $31 per hour as Hawks’ Electronic Repair Shop’s 2008 labor rate.