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Cost-Based Pricing and Markups with Variable Costs Compu Services provides computerized inventory consulting. The office and computer expenses are $600,000 annually and are not assigned to specific jobs. The consulting hours available for the year total 20,000, and the average consulting hour has $30 of variable costs. (a) If the company desires a profit of $80,000, what should it charge per hour? $Answer

(b) What is the markup on variable costs if the desired profit is $120,000? Answer % (c) If the desired profit is $120,000, what is the markup on variable costs to cover (1) unassigned costs and (2) desired profit? Markup to cover unassigned costs Answer % Markup to cover desired profits Answer %