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