Cost$-$Based Pricing and Markups with Variable Costs

Computer Consultants provides computerized inventory consulting. The office and computer expenses are $$830,000$ annually and are not assigned to specific jobs. The consulting hours available for the year total $18,000,$ and the average consulting hour has $$40$ of variable costs.

$($a$)$ If the company desires a profit of $$250,000,$ what should it charge per hour?$$Round to the nearest cent.

$Answer $1$

$($b$)$ What is the markup on variable costs if the desired profit is $$322,000?$ Round to the nearest whole percent.

Answer $2\%$

$($c$)$ If the desired profit is $$100,000,$ what is the markup on variable costs to cover $(1)$ unassigned costs and $(2)$ desired profit? Round to the nearest whole percent.

Markup to cover unassigned costs Answer $3\%$

Markup to cover desired profits Answer $4\%$