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"Help me now" is a company in Pittsburg. The owner provides services by himself and is considering opening another store in Baltimore. This new store will be operated by his brother. Both brothers are passionate about healthy life and preventing disease. The company sells tailored services depending on the customers' individual goals. The overhead for the following year was estimated at $400,000, and the estimated hours of counselling in 20,000 hours. Counselors and trainers are paid $40 per hour. This information is total for both stores. For managerial analysis purpose, they allocate the costs based on the number of hours of consulting of each client. The following chart has information about three customers for the year. Paul John 40 hours 60 hours 20 hours 40 hours $1,000 $2,000 Fitness Nutrition services Vitamin and supplements 1. Determine the total cost of serving each client. 2. Calculate the profitability of each client considering the pricing strategy: a. Supplements are priced 20% above cost. b. Clients are charged $60 per hour of counseling. George 80 hours 24 hours $600

"Help me now" is a company in Pittsburg. The owner provides services by himself and is considering opening another store in Baltimore. This new store will be operated by his brother. Both brothers are passionate about healthy life and preventing disease. The company sells tailored services depending on the customers' individual goals. The overhead for the following year was estimated at $400,000, and the estimated hours of counselling in 20,000 hours. Counselors and trainers are paid $40 per hour. This information is total for both stores. For managerial analysis purpose, they allocate the costs based on the number of hours of consulting of each client. The following chart has information about three customers for the year. Paul John 40 hours 60 hours 20 hours 40 hours $1,000 $2,000 Fitness Nutrition services Vitamin and supplements 1. Determine the total cost of serving each client. 2. Calculate the profitability of each client considering the pricing strategy: a. Supplements are priced 20% above cost. b. Clients are charged $60 per hour of counseling. George 80 hours 24 hours $600

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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"Help me now" is a company in Pittsburg. The owner provides services by himself and is considering opening another store in Baltimore. This new store will be operated by his brother. Both brothers are passionate about healthy life and preventing disease. The company sells tailored services depending on the customers' individual goals. The overhead for the following year was estimated at $400,000, and the estimated hours of counselling in 20,000 hours. Counselors and trainers are paid $40 per hour. This information is total for both stores. For managerial analysis purpose, they allocate the costs based on the number of hours of consulting of each client. The following chart has information about three customers for the year. John Paul 40 hours 60 hours 20 hours 40 hours $1,000 $2,000 Fitness Nutrition services Vitamin and supplements 1. Determine the total cost of serving each client. 2. Calculate the profitability of each client considering the pricing strategy: a. Supplements are priced 20% above cost. b. Clients are charged $60 per hour of counseling. George 80 hours 24 hours $600
Transcribed Image Text:"Help me now" is a company in Pittsburg. The owner provides services by himself and is considering opening another store in Baltimore. This new store will be operated by his brother. Both brothers are passionate about healthy life and preventing disease. The company sells tailored services depending on the customers' individual goals. The overhead for the following year was estimated at $400,000, and the estimated hours of counselling in 20,000 hours. Counselors and trainers are paid $40 per hour. This information is total for both stores. For managerial analysis purpose, they allocate the costs based on the number of hours of consulting of each client. The following chart has information about three customers for the year. John Paul 40 hours 60 hours 20 hours 40 hours $1,000 $2,000 Fitness Nutrition services Vitamin and supplements 1. Determine the total cost of serving each client. 2. Calculate the profitability of each client considering the pricing strategy: a. Supplements are priced 20% above cost. b. Clients are charged $60 per hour of counseling. George 80 hours 24 hours $600
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