Georgia Temps, a large labor contractor, supplies contract labor to construction companies. For $2020,$ Georgia Temps has budgeted to supply $88,000$ hours of contract labor. Its variable costs are $$13$ per hour, and its fixed costs are $$264,000.$ Roger Mason, the general manager, has proposed a cost$-$plus approach for pricing labor at full cost plus $15\%.$

Read the requirements

Requirement $1.$ Calculate the price per hour that Georgia Iemps should charge based on Mason's proposal.

Begin by deternining 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.$)q,$

Price per hour

$q,,=$

Requirement $2.$ On the basis of the additional infomation, calculate the price per hour that Georgia Temps should charge to maximize operating income.

P

a

The brice ber hour that should be charaed is

Requirement $3.$ Comment on your answers to requirements $1$ and $2.$ Why are they the same or different?

The two different approaches lead to

$q,$ prices in requirements $1$ and $2.$ Pricing decisions

demand or market considerations and

supply or cost factors.

The approach in requirement $1$ is

$$ The approach in requirement $2$ is

$$

Requirements

Calculate the price per hour that Georgia Temps should charge based on Mason's proposal.

The marketing manager supplies the following information on demand levels at different prices:

$\backslash$table$[[\backslash$table$[[$Price per$],[$Hour$]],\backslash$table$[[$Demand$],[($Hours$)]],],[$$$,17,125,000],[,18,101,000],[,20,88,000],[,21,74,000],[,22,66,000]]$

Georgia 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 Georgia Temps should charge to maximize operating income.

$3.$ Comment on your answers to requirements $1$ and $2.$ Why are they the same or different?