Jake Black has an opportunity to start an automobile pollution inspection business. After extensive studies, he...
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Jake Black has an opportunity to start an automobile pollution inspection business. After extensive studies, he has developed the following set of projected annual data on which to make his decision: Direct service labor Variable service overhead costs $330,000 260.000 Fixed service overhead oosts 250,000 160,000 200.000 Selling expenses General and administrative expenses Desired profit Cost of assets em ployed 102,000 600,000 Black believes that his company will inspect 100,000 automobiles per year. The company earns an average of 20 percent return on its assets. Round your answers to two decimal places. a. Compute the projected cost for inspecting each automobile. b. Determine the price to charge for inspecting each automobile using the gross margin pricing method. c. Using the return on assets pricing method, compute the unit price to charge for this service. Jake Black has an opportunity to start an automobile pollution inspection business. After extensive studies, he has developed the following set of projected annual data on which to make his decision: Direct service labor Variable service overhead costs $330,000 260.000 Fixed service overhead oosts 250,000 160,000 200.000 Selling expenses General and administrative expenses Desired profit Cost of assets em ployed 102,000 600,000 Black believes that his company will inspect 100,000 automobiles per year. The company earns an average of 20 percent return on its assets. Round your answers to two decimal places. a. Compute the projected cost for inspecting each automobile. b. Determine the price to charge for inspecting each automobile using the gross margin pricing method. c. Using the return on assets pricing method, compute the unit price to charge for this service.
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Answer a Compute the projected cost for inspecting each automobile Total costs Direct service labor ... View the full answer
Related Book For
Managerial Decision Modeling with Spreadsheets
ISBN: 978-0136115830
3rd edition
Authors: Nagraj Balakrishnan, Barry Render, Jr. Ralph M. Stair
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