If mark up is based on variable costs how much revenue must

Reference no: EM13586335

Product Pricing: Macquarian intelligent communications provides computer related services to its clients. Its two primary services are web page design, and internet consulting services. Assume that Macquarian's management expects to earn 20 percent annual return on the assets invested. Macquarium has invested $8 million since its opening. the annual costs for the coming year are expected to be as follows: Consulting support $600,000 (variable costs) and $1,050,000 (fixed costs), Sales and administration $100,000 (variable costs) and $850,000 (fixed costs). The two services expend about equal costs per hour, and the predicted hours for the coming year are 50,000 for WPD and 30,000 for ICS. REQUIRED..

.a. if mark up is based on variable costs, how much revenue must each service generate to provide the profit expected by corporate headquarters? What is the anticipated revenue per hour for each service?

b. If the markup is based on total costs, how much revenue must each service generate to provide thr expected profit?

c.Explain why answers in requirements (a) and (b) are either the same or different. d. comment on the advantages and disadvantages of using a cost based pricing model. Show your work

Reference no: EM13586335

Questions Cloud

Describe the appropriate circumstances for using the : normal 0 false false false en-us x-none x-none

As a purchasing agent you are tasked with getting the : performing purchasing agent duties business is booming for waters inc. a growing customer service fulfillment business.

Ernie gilmore began working as a part-time waiter on june : ernie gilmore began working as a part-time waiter on june 12012 at sporthouse restaurant. the cash tips of 390 that he

During 2002 real gdp in japan rose about 13 percent during : during 2002 real gdp in japan rose about 1.3 percent. during the same period retail sales in japan fell 1.8 percent in

If mark up is based on variable costs how much revenue must : product pricing macquarian intelligent communications provides computer related services to its clients. its two

You can receive 10000 today or 3000 per year for the next : you can receive 10000 today or 3000 per year for the next five years. if the required rate of return is 10 what option

Logan products computes its predetermined overhead rate : logan products computes its predetermined overhead rate annually on the basis of direct labor-hours. at the beginning

Iale is 800000 variable cost 480000 fixed cost : if sale is 800000 variable cost 480000 fixed cost 160000.the global industry is thinking of expanding the

Department head those bean counters have messed up again i : ahnuld corporation a health juice producer recently expanded its sales through exports to foreign markets. earlier this

User Account

All Pages