Question
Swift Tech Solutions provides tech support services. Each support session takes approximately 2 hours. The company anticipates 5,000 support sessions annually. They have invested $1,500,000
Swift Tech Solutions provides tech support services. Each support session takes approximately 2 hours. The company anticipates 5,000 support sessions annually. They have invested $1,500,000 in their facilities and aim for an ROI of 18%. The budgeted costs for the coming year are shown below:
| Cost Item | Per Session ($) | Total ($) |
|---|---|---|
| Direct Materials (Software) | 10 | 50,000 |
| Direct Labor (Technicians) | 40 | 200,000 |
| Variable Overhead | 15 | 75,000 |
| Fixed Overhead | - | 270,000 |
| Variable Selling & Admin Expenses | 10 | 50,000 |
| Fixed Selling & Admin Expenses | - | 180,000 |
Required:
- Determine the total cost per session.
- Calculate the desired ROI per session.
- Compute the target price per session.
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Entrepreneurship
Authors: Andrew Zacharakis, William D Bygrave
5th Edition
1119563097, 9781119563099
