Jensen Marine Supplies Inc The Amount to Be Added to Each Dollar of Material

Multiple Choice

Jensen Marine Supplies Inc. uses time and material pricing. The Mechanics Department, which anticipates 20,000 direct labour hours of activity, has the following data: $\begin{array}{l}\text { Annual overhead costs: }\\\begin{array} { l r } \text { Material handling and storage } & \$ 20,000 \\\text { Other overhead costs } & 60,000 \\\text { Annual cost of materials used } & 200,000 \\\text { Labour rate per hour, including fringe benefits } & 20 \\\text { Hourly charge to achieve profit margin } & 15\end{array}\end{array}$ The amount to be added to each dollar of material cost to obtain the total material charge is:

A) $0.09.
B) $0.10.
C) $0.25.
D) $0.30.
E) $0.40.