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1. Calculate the price per hour that Nevada Temps should charge based on Mason's proposal. 2. The marketing manager supplies the following information on demand levels at different prices: Price per Hour Demand (Hours) $ 18 123,000 20 106,000 21 81,000 22 71,000 23 60,000 Nevada Temps can meet any of these demand levels. Fixed costs will remain unchanged for all the demand levels. On the basis of this additional information, calculate the price per hour that Nevada Temps should charge to maximize operating income. 3. Comment on your answers to requirements 1 and 2. Why are they the same or different?

1. Calculate the price per hour that Nevada Temps should charge based on Mason's proposal. 2. The marketing manager supplies the following information on demand levels at different prices: Price per Hour Demand (Hours) $ 18 123,000 20 106,000 21 81,000 22 71,000 23 60,000 Nevada Temps can meet any of these demand levels. Fixed costs will remain unchanged for all the demand levels. On the basis of this additional information, calculate the price per hour that Nevada Temps should charge to maximize operating income. 3. Comment on your answers to requirements 1 and 2. Why are they the same or different?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Calculate the price per hour that Nevada Temps should charge based on Mason's proposal. 2. The marketing manager supplies the following information on demand levels at different prices: Price per Hour $ Demand (Hours) 18 123,000 20 106,000 21 81,000 22 71,000 23 60,000 Nevada Temps can meet any of these demand levels. Fixed costs will remain unchanged for all the demand levels. On the basis of this additional information, calculate the price per hour that Nevada Temps should charge to maximize operating income. 3. Comment on your answers to requirements 1 and 2. Why are they the same or different?
Transcribed Image Text:1. Calculate the price per hour that Nevada Temps should charge based on Mason's proposal. 2. The marketing manager supplies the following information on demand levels at different prices: Price per Hour $ Demand (Hours) 18 123,000 20 106,000 21 81,000 22 71,000 23 60,000 Nevada Temps can meet any of these demand levels. Fixed costs will remain unchanged for all the demand levels. On the basis of this additional information, calculate the price per hour that Nevada Temps should charge to maximize operating income. 3. Comment on your answers to requirements 1 and 2. Why are they the same or different?
Nevada Temps, a large labor contractor, supplies contract labor to construction companies. For 2020, Nevada Temps has budgeted to supply 81,000 hours of contract labor. Its variable costs are $13 per hour, and its fixed costs are $324,000. Roger Mason, the general manager, has proposed a cost-plus approach for pricing labor at full cost plus 25%. Read the requirements. Requirement 1. Calculate the price per hour that Nevada Temps should charge based on Mason's proposal. Begin by determining the formula to calculate the price per hour based on Mason's proposal, then calculate the price. (Complete all answer boxes. Round the price per hour to two decimal places.) Full cost per hour (100% + Markup percentage ) = = Price per hour
Transcribed Image Text:Nevada Temps, a large labor contractor, supplies contract labor to construction companies. For 2020, Nevada Temps has budgeted to supply 81,000 hours of contract labor. Its variable costs are $13 per hour, and its fixed costs are $324,000. Roger Mason, the general manager, has proposed a cost-plus approach for pricing labor at full cost plus 25%. Read the requirements. Requirement 1. Calculate the price per hour that Nevada Temps should charge based on Mason's proposal. Begin by determining the formula to calculate the price per hour based on Mason's proposal, then calculate the price. (Complete all answer boxes. Round the price per hour to two decimal places.) Full cost per hour (100% + Markup percentage ) = = Price per hour
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