Western Temps supplies contract labor to building$-$construction companies. For $2020,$ Western has budgeted to supply $84,000$ hours of contract labor. Its variable costs are $$13$ per hour, and its fixed costs are $$168,000.$ Will Thornton, the general manager, has proposed a cost$-$plus approach for pricing labor at full cost plus $20\%.$

$1.$ Calculate the price per hour that Western Temps should charge based on Thornton's proposal.

$2.$ The marketing manager supplies the following information on demand levels at different prices:

Price$/$hour Demand $($Hrs$)$

$$16124,000$

$17104,000$

$1884,000$

$1974,000$

$2061,000$

Western can meet any of these demand levels. Fixed costs will remain unchanged since all levels are within their relevant range. On the basis of the additional information, calculate the price per hour that Western should charge to maximize operating income.

$3.$ Comment on your answers to both $1.$ and $2.$ Why are they the same or different?Western Temps supplies contract labor to building$-$construction companies. For $2020,$ Western

has budgeted to supply $84,000$ hours of contract labor. Its variable costs are $$13$ per hour, and

its fixed costs are $$168,000.$ Will Thornton, the general manager, has proposed a cost$-$plus

approach for pricing labor at full cost plus $20\%.$

Calculate the price per hour that Western Temps should charge based on Thornton's

proposal.

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

prices:

Western can meet any of these demand levels. Fixed costs will remain unchanged since all

levels are within their relevant range. On the basis of the additional information, calculate the

price per hour that Western should charge to maximize operating income.

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