Jeny is studying Finance at University. To complete the Finance degree she has to take a basic income tax course. Because Jeny does not intend to be a tax expert she considers the course to be a waste of his time. Discuss the merits of Jeny's opinion, that is, whether or not she can benefit from a tax course and how. Cost-Based Pricing and Markups with Variable Costs
Compute Services provides computerized inventory consulting. The office and computer expenses are $400,000 annually and are not assigned to specific jobs. The consulting hours available for the year total 20,000, and the average consulting hour has $20 of variable costs.
(a) If the company desires a profit of $140,000, what should it charge per hour?
$Answer
(b) What is the markup on variable costs if the desired profit is $160,000?
Answer %
(c) If the desired profit is $160,000, what is the markup on variable costs to cover (1) unassigned costs and (2) desired profit?
Markup to cover unassigned costs Answer %
Markup to cover desired profits Answer %