Question

Company is a management consulting firm. Last​ month, Pacific completed a consulting job for Client 76 and assigned total costs of $ 16 comma 265 to the job. Pacific desires a 10​% target operating income after covering all costs. What would Pacific have to charge the customer to achieve that operating​ income? Round to two decimal places

Answer 1

Answer:

The Pacific have to charge the customer to achieve that operating income  is $17892.

Explanation:

The target Price Pacific should charge to $17892 as it covers the target operating income as well as it covers the total cost of project. The total cost of project is at the level of $16265 x (100 + 10) / 100 = $17892. The difference of $1627 indicates the operating profit of company. Therefore, Pacific should charge 10% the cost of Job for Client 76.