Carlos Consulting Inc. provides financial consulting and has collected the following data for the next year’s budgeted activity for a lead consultant.
Consultants’ wages $90,000
Fringe benefits $22,500
Related overhead $17,500
Supply clerk’s wages $18,000
Fringe benefits $4,000
Related overhead $20,000
Profit margin per hour $20
Profit margin on materials 15%
Total estimated consulting hours 5,000
Total estimated material costs $168,000
Required:
1. The material loading charge is .
2. A consulting job takes 20 hours of consulting time and $180 of materials. What would be the client's bill?

1. The material loading charge is 40%.

2. The client's bill that takes 20 hours of consulting time and $180 of materials will be $1,100.

Data and Calculations:

Consultants’ wages =  $90,000

Fringe benefits =         $22,500

Related overhead =     $17,500

Total consultants'    $130,000

Profit margin per hour = $20

Total profit on consultant's

expenses =             $100,000 ($20 x 5,000)

Total revenue =      $230,000

Charges per hour = $46 ($230,000/5,000)

Supply clerk’s wages = $18,000

Fringe benefits =            $4,000

Related overhead =     $20,000

Clerks' expenses =     $42,000

Profit margin on materials =   $25,200

Total loading charge = $67,200

Material loading charge = Total loading charge/Total material costs x 100

= 40% ($67,200/$168,000 x 100)

Profit margin on materials = 15%

= $25,200 ($168,000 x 15%)

Total estimated consulting hours 5,000

Total estimated material costs = $168,000

Bill for a client:

20 hours of consulting time = $920 (20 x $46)

Cost of materials =                   $180

Total bill =                              $1,100 ($920 + $180)

Thus, the bill for the client is $1,100.

Learn more about material loading charge here: link

Based on the information given, it can be noted that the material loading charge will be 40%.

The total consultant is given as:

= $90000 + $22500 + $17500

= $130000

Expenses = $100,000.

Total revenue = $230,000

The material loading charge will be calculated thus:

= Total loading charge / Total material cost × 100

= 68200/16800 × 100

= 40%

Also, the clients bill will be calculated thus:

= (20 × $46) + $180

= $920 + $180

= $1100

Therefore, the bill is $1100.

Learn more about material loading on:

link

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