Question
North Dakota Temps, a large laborcontractor, supplies contract labor tobuilding-construction companies. For 2017, NorthDakota Temps has budgeted to supply 83,000 hours of contract labor. Its
North Dakota Temps, a large laborcontractor, supplies contract labor tobuilding-construction companies. For 2017, NorthDakota Temps has budgeted to supply 83,000 hours of contract labor. Its variable costs are $11 perhour, and its fixed costs are $166,000. RogerMason, the generalmanager, has proposed acost-plus approach for pricing labor at full cost plus 25%.
Read the requirementsLOADING...
.
Requirement 1. Calculate the price per hour that NorthDakota Temps should charge based onMason's proposal.
Begin by determining the formula to calculate the price per hour based onMason's proposal, then calculate the price. (Complete all answer boxes. Round the price per hour to two decimalplaces.) = Price per hour =
Requirement 2. On the basis of the additionalinformation, calculate the price per hour that NorthDakota Temps should charge to maximize operating income.
First select the formula that will be used to determine the optimal price perhour, then calculate the total contribution at each price per hour. = Total contribution Price per hour
at: $ 14 = $15 = $16 = $1=$18= The price per hour that should be charged is $ 16
$16
$ 18
$18
$ 15
$15
$ 14
$14
$ 17
$17
.
Requirement 3. Comment on your answers to requirements 1 and 2. Why are they the same ordifferent?
The two different approaches lead to
the same
two different
prices in requirements 1 and 2. Pricing decisions
should consider
should not consider
demand or market considerations and
should consider
should not consider
supply or cost factors.
The approach in requirement 1 is
the more balanced approach.
used as a starting point. Then it is modified based on market considerations.
The approach in requirement 2 is
the more balanced approach.
used as a starting point. Then it is modified based on market considerations.
Choose from any list or enter any number in the input fields and then continue to the next question.
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