Solution-What is the maximum hourly rate bid you would

What is the maximum hourly rate bid you would accept

Reference no: EM133136794

Question - Eagle's Crest Design is an interior design firm that specializes in hotel interior decorating. The design firm consists of two distinct services: Sketching and Installation. There are also support functions for the Eagle's Crest Design that are separated into two departments: Office and Technology Support. Office encompasses all the expenses associated with the office support necessary to run the business. Technology Support includes any expenses associated with the computer systems required to operate the business as well as those used to sketch and install the designs. Cost data for the services and the support functions are as follows:

Technology Support	$21,000
Office	$16,000
Sketching	$46,695
Installation	$60,305
Total	$144,000

The Office and Technology Support costs are allocated based on the service hours. The departments receive the following percentage of service hours from the departments:

Department rendering service	Technology Support	Office	Sketching	Installation
Technology Support	--	15%	45%	40%
Office	40%	--	25%	35%

If $10,500 of the Technology Support cost referenced above were fixed and could not be eliminated (i.e $10,500 would remain if you were to outsource all 1,000 hours of Technology Support). Assuming that everything else is the same, what is the maximum hourly rate bid you would accept from a third party?

Reference no: EM133136794

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What is the maximum hourly rate bid you would accept

Reference no: EM133136794

Reference no: EM133136794

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