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North Dakota Temps, a large labor contractor, supplies contract labor to building-construction companies. For 2017, North Dakota Temps has budgeted to supply 87,000 hours of
North Dakota Temps, a large labor contractor, supplies contract labor to building-construction companies. For 2017, North Dakota Temps has budgeted to supply 87,000 hours of contract labor. Its variable costs are $10 per hour, and its fixed cots are $261,000. Roger Mason, the general manager, has proposed a cost-plus approach for pricing labor at full cost plus 10%.
1. Calculate the price per hour that North Dakota 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) 5 14 126.000 Price per 15 102.000 17 87 000 18 70.000 20 64.000 North Dakota 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 North Dakota Temps should charge to maximize operating income 3. Comment on your answers to requirements 1 and 2 Why are they the same or different? Print Done ose
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