Delaware Temps, a large labor contractor, supplies contract labor to building-construction companies. For 2017, Delaware Temps...

 

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Delaware Temps, a large labor contractor, supplies contract labor to building-construction companies. For 2017, Delaware Temps has budgeted to supply 89,000 hours of contract labor. Its variable costs are $13 per hour, and costs are $356,000. Roger Mason, the general manager, has proposed a cost-plus approach for pricing labor at full cost plus 10%. Read the requirements. Requirement 1. Calculate the price per hour that Delaware Temps should charge based on Mason's proposal. Begin by determining the formula to calculate the price per hour based on Mason's proposal, then calculate the price. (Complete all answer boxes. Round the price per hour to two decimal places.) Full cost per hour Price per hour (100% + Markup percentage) Requirements 1. Calculate the price per hour that Delaware Temps should charge based on Mason's proposal. 2. The marketing manager supplies the following information on demand levels at different prices: Price per Hour $ Demand (Hours) 126,000 102,000 89,000 74,000 18 19 21 22 24 65,000 Delaware Temps can meet any of these demand levels. Fixed costs will remain unchanged for all the demand levels. On the basis of this additional information, calculate the price per hour that Delaware Temps should charge to maximize operating income. 3. Comment on your answers to requirements 1 and 2. Why are they the same or different? X Delaware Temps, a large labor contractor, supplies contract labor to building-construction companies. For 2017, Delaware Temps has budgeted to supply 89,000 hours of contract labor. Its variable costs are $13 per hour, and costs are $356,000. Roger Mason, the general manager, has proposed a cost-plus approach for pricing labor at full cost plus 10%. Read the requirements. Requirement 1. Calculate the price per hour that Delaware Temps should charge based on Mason's proposal. Begin by determining the formula to calculate the price per hour based on Mason's proposal, then calculate the price. (Complete all answer boxes. Round the price per hour to two decimal places.) Full cost per hour Price per hour (100% + Markup percentage) Requirements 1. Calculate the price per hour that Delaware Temps should charge based on Mason's proposal. 2. The marketing manager supplies the following information on demand levels at different prices: Price per Hour $ Demand (Hours) 126,000 102,000 89,000 74,000 18 19 21 22 24 65,000 Delaware Temps can meet any of these demand levels. Fixed costs will remain unchanged for all the demand levels. On the basis of this additional information, calculate the price per hour that Delaware Temps should charge to maximize operating income. 3. Comment on your answers to requirements 1 and 2. Why are they the same or different? X

Answer rating: 100% (QA)

Solution Requirement 1 Calculate the price per hour that Delaware Temps shoul... View the full answer