Question

Requirement 3. If Sierra Design wants to earn profits equal to 20​% of sales​ revenue, how much​ (what total​ fee) should the company charge each of these two​ clients? Identify the formula then determine the amount Sierra Design should charge these clients. ​(Round your answers to the nearest whole​ dollar.)

Answer 1

Answer:

sales revenue = total costs/0.8 ; Client 1 Sales revenue = $177,550/- ; Sales revenue = $10,691/-

Explanation:

Assumptions:

As total job costs are not provided so they would be assumed(using similar question) as:

client 1 = T.C ; total job costs = $142,040.00

client 2 = G.G.Com ; total job costs = $8553.00

Given Data:

Profit = 20% of sales revenue

Solution:

As we know that

total cost = sales revenue - profit

total cost = sales revenue - 0.2*sales revenue  (given: profit=0.2sales revue)

By arrangiing this equation, we get

                    sales revenue = total costs/0.8

Now for Client 1(T.C)

Sales revenue = total costs/ 0.8

                        = 142040/0.8

Sales revenue = $177,550/-

Now for Client 2 (G.G.Com)

Sales revenue = total costs/ 0.8

                         = 8553/ 0.8

Sales revenue = $10,691/-