(Answered) Question - cost-based pricing and markups with variable

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Question - Cost-Based Pricing and Markups with Variable Costs

Compu Services provides computerized inventory consulting. The office and computer expenses are $400,000 annually and are not assigned to specific jobs. The consulting hours available for the year total 20,000, and the average consulting hour has $20 of variable costs.

(a) If the company desires a profit of $140,000, what should it charge per hour?

(b) What is the markup on variable costs if the desired profit is $160,000?

(c) If the desired profit is $160,000, what is the markup on variable costs to cover (1) unassigned costs and (2) desired profit?

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