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Communications Unlimited provides support services to its clients. This company expects to earn an annual return on the assets invested at a rate of 15%. The company has $5,000,000 invested in the business.
The annual budgeted costs for for the next years are:
Variable costs: $400,000
Fixed costs: $1,900,000
The annual budgeted hours for next year are:
Consulting services: 40,000 hours
Problem 1). Determine the target profit for the company?
Problem 2). Determine the markup on Variable Costs in percentage terms?
Problem 3). Determine the revenue per hour that will be charged if variable costs is the basis for markup?
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