Cost-plus time and materials ethics r amp c mechanical
Course:- Accounting Basics
Reference No.:- EM13601541

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Cost-plus, time and materials, ethics. R & C Mechanical sells and services plumbing, heating, and air conditioning systems. R & C's cost accounting system tracks two cost categories: direct labor and direct materials. R & C uses a time-and-materials pricing system, with direct labor marked up 100% and direct materials marked up 60% to recover indirect costs of support staff, support materials, and shared equipment and tools, and to earn a profit.
R & C technician Greg Garrison is called to the home of Ashley Briggs on a particularly hot summer day to investigate her broken central air conditioning system. He considers two options: replace the compressor or repair it. The cost information available to Garrison follows:
Labor Materials
Repair option 5 hrs. $100
Replace option 2 hrs. $200
Labor rate $30 per hour

• 1. If Garrison presents Briggs with the replace or repair options, what price would he quote for each?

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