Company is a management consulting firm. Last month, Pacific completed a consulting job for Client 76 and assigned total costs of $ 16 comma 265 to the job. Pacific desires a 10 % target operating income after covering all costs. What would Pacific have to charge the customer to achieve that operating income? Round to two decimal places

Question

Business

Ben Ayers

27 April, 20:38

Company is a management consulting firm. Last month, Pacific completed a consulting job for Client 76 and assigned total costs of $ 16 comma 265 to the job. Pacific desires a 10 % target operating income after covering all costs. What would Pacific have to charge the customer to achieve that operating income? Round to two decimal places

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Macy Hodge · Answer 1

The Pacific have to charge the customer to achieve that operating income is $17892.

Explanation:

The target Price Pacific should charge to $17892 as it covers the target operating income as well as it covers the total cost of project. The total cost of project is at the level of $16265 x (100 + 10) / 100 = $17892. The difference of $1627 indicates the operating profit of company. Therefore, Pacific should charge 10% the cost of Job for Client 76.