Godfrey Associates adopts a target rate of return pricing system for its services and expects a target rate of return of 25% on an investment of \($750,000.\) Its labour costs are \($25\) per hour and other variable costs are \($4\) per hour. The company anticipates charging. 20, 000 hours per year to clients and has fixed overheads of $250,000.

a. Calculate Godfrey's target selling price per hour.

b. Assume Godfrey operates in a competitive market where the average market price is \($50\) per hour. What price should Godfrey charge per hour? Is this price feasible with its current cost structure?

c. Assume the competitive market price is still \($50\) per hour, if Godfrey was able to charge 30,000 hours per year, how would this impact its profitability?