QUESTION 23 Partially correct Points out of 4.00P Flag question Cost-Based Prici

Question

QUESTION 23 Partially correct Points out of 4.00P Flag question Cost-Based Pricing and Markups with Variable Costs Compu Services provides computerized inventory consulting. The office and computer expenses are $625,000 annually and are not assigned to specific jobs. The consulting hours available for the year total 20,000, and the average consulting hour has $30 of variable costs. (a) If the company desires a profit of $100,000, what should it charge per hour? Round to the nearest cent. $66.25 (b) What is the markup on variable costs if the desired profit is $150,000? Round to the nearest whole percent. | 130 % (c) If the desired profit is $60,000, what is the markup on variable costs to cover (1) unassigned costs and (2) desired profit? Round to the nearest whole percent. Markup to cover unassigned costs 1009% Markup to cover desired profits 140% Check

Explanation / Answer

Here,only (a) is considered as requirement:

Cost per hour:

[Fixed costs+variable costs+desired profits]/total hours

[$625000+(20000 hours×$30)+$100000]/20000 hours

=$66.25 per hour.

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