Question

An architecture firm charges clients $250 per hour for their services, and they pay their architects an average of $175 per hour. They expect to accumulate 10,000 hours of architecture work this year. Their other costs include marketing and general administrative costs totaling $615,000 per year. What is the firm's profit before taxes?A)$135,000 B)$140,000 C)$115,000 D)$615,000 E)$750,000

Answer 1

Answer:

A)$135,000

Explanation:

service fee      250

average wage 175

contribution 75 this is the ammount generate per hour billed

expected hours billed for the year 10,000

hours x contribution per hour = total contribution

10,000 x 75 =                  750,000

Operating cost              (615,000)  

Earnings before taxes    135,000