Yelk Garage Uses Time and Materials Pricing What Should Yelk Set as the Materials Markup Per Dollar

question 3

Multiple Choice

Yelk Garage uses time and materials pricing.It is setting prices for next year using the following information: $$\begin{array}{l}\begin{array} { l l r } \text { Labor rate, including fringe benefits}&\$ 50 \text { per hour } \\\text { Annual labor hours}&3,350 \text { hours } \\\text { Annual materials purchases}&\$ 825,000 \\\text { Materials purchasing, handling, and storage}&\$ 41,250 \\\text { Overhead for depreciation, taxes, insurance, etc.}&\$ 67,000 \\\text { Target profit margin for both labor and materials}&20 \%\end{array}\end{array}$$ What should Yelk set as the materials markup per dollar of materials used?

• A)25%.
• B)5%.
• C)20%.
• D)35%.
• E)30%.

---

Definitions:

Foreseeable Loss

Losses that could have been anticipated or predicted as a consequence of an action or inaction, relevant in determining liability.

Non Est Factum

A defense in contract law where a party claims they were mistaken about the nature of the document signed, not merely its terms.

Caveat Emptor

A Latin phrase meaning "let the buyer beware," placing the responsibility on the buyer to perform due diligence before making a purchase.

Equitable Remedy

A court-ordered action typically taken to prevent or resolve harm rather than monetary compensation, aiming to ensure fairness.