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Nebraska Temps, a large labor contractor, supplies contract labor to construction companies. For 2020, Nebraska Temps has budgeted to supply 81,000 hours of contract labor.
Nebraska Temps, a large labor contractor, supplies contract labor to construction companies. For 2020, Nebraska Temps has budgeted to supply 81,000 hours of contract labor. Its variable costs are $13 per hour, and its fixed costs are $243,000. 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 Nebraska 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 1. Calculate the price per hour that Nebraska Temps should charge based on Mason's proposal. 2. The marketing manager supplies the following information on demand levels at different prices: Price per Demand Hour (Hours) $ 17 122,000 18 103,000 20 81,000 21 70,000 23 60,000 Nebraska 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 Nebraska 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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