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Delaware Temps, a large labor contractor, supplies contract labor to building construction companies. For 2017, Delaware Tempe has budgeted to supply 89,000 hours of contract
Delaware Temps, a large labor contractor, supplies contract labor to building construction companies. For 2017, Delaware Tempe has budgeted to supply 89,000 hours of contract labor. Its variable costs are $13 per hour, and its fixed costs are $356,000. Roger Mason, the general manager, has proposed a cost-plus approach for pricing labor at full cost plus 10%. Read the requirements. Requirement 1. Calculate the price per hour that Delaware Temps should charge based on Mason's proposal, Begin by determining the formula to calculate the price per hour based on Mason's proposal, then calculate the price. (Complete all answer boxes. Round the price per hour to two decimal places.) Price per hour - Requirements ur to two de 1. Calculate the price per hour that Delaware Temps should charge based on Mason's proposal. 2. The marketing manager supplies the following information on demand levels at different prices: Demand Hour (Hours) Price per $ 18 126,000 19 102,000 21 89,000 22 74,000 24 65,000 Delaware Temps can meet any of these demand levels. Fixed costs will remain unchanged for all the demand levels. On the basis of this additional information, calculate the price per hour that Delaware Temps should charge to maximize operating income. 3. Comment on your answers to requirements 1 and 2. Why are they the same or different
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