Cost-based pricing

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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?
$Answer

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

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

Reference no: EM13516224

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