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Sergeeva-Olga [200]
3 years ago
14

"Compu Services provides computerized inventory consulting. The office and computer expenses are $400,000 annually and are not a

ssigned to specific jobs. The consulting hours available for the year total 20,000, and the average consulting hour has $20 of variable costs."
If the company desires a profit of $140,000, what should it charge per hour?
Business
1 answer:
Alika [10]3 years ago
3 0

Answer:

$47

Explanation:

The calculation of charge per hour is shown below:-

Variable cost per hour = $ 20

Unassigned cost per hour = $400,000

Total cost = 20 × $20,000 + $400,000

= $800,000

Profit = $140,000

Total revenue to be collected = $800,000 + $140,000

= $940,000

Per hour charge = Total revenue to be collected ÷ Consulting hours available for the year

= $940,000 ÷ $20,000

= $47

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The computation of the annual rate of return is shown below;

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