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Communications Unlimited provides support services to its clients. This company expects to earn an annual return on the assets invested at a rate of: 16%

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Communications Unlimited provides support services to its clients. This company expects to earn an annual return on the assets invested at a rate of: 16% The company has the following amount invested in the business $6,000,000 The annual budgeted costs for next year are: Variable costs Fixed costs Support Services $400,000 1,900,000 The annual budgeted hours for next year are: Consulting services 50,000 hours Required: You must use cell references for all calculations. 1. Determine the Target profit for the company. 2. Determine the markup on variable costs in percentage terms. 9 3. Determine the variable cost per hour. 4. Determine the revenue per hour that will be charged if variable costs is the basis for markup. 5. Determine the markup on total costs in percentage terms. 6. Determine the total cost per hour. 8 7. Determine the revenue per hour that will be charged if total costs is the basis for markup. 8. Explain why answers 2-4 in comparison to 5-7 are the same or different. 4 9. Discuss the advantages and disadvantages of using a cost-based pricing model. You need to include an outside reference that supports your discussion on advantages and disadvantages of using a cost-based pricing model. 6 Make sure you include the reference in APA style. Enter your response in the textbox below. Type or copy your response into this textbox, which must include comments from outside reference to support your discussion of cost-based pricing model. Make sure you provide outside reference with APA citation below your comments

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