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Calculating Price by Applying a Markup Percentage to CostIntegrity Accounting Firm provides various financial services to organizations. Integrity has decided to price its jobs at the total variable costs of the job plus 15.3 percent. The job for a medium-sized dance club client included the following costs:Direct materials $ 5,000Direct labor (partners and staff accountants) 90,000Depreciation (using straight-line method) onIntegrity’s office building 50,000Required:Calculate the price charged by Integrity Accounting Firm to the dance club. If required, round to the nearest dollar.

Respuesta :

Answer:

The price charged by Integrity Accounting Firm to the dance club will be $ 109,535.

Explanation:

This question requires us to calculate the price charged by Integrity Accounting Firm to the dance club. The pricing mechanism is total variable cost plus 15.3 %. So price can be calculated as follow.

Direct Material Cost =    $ 5000

Direct Labor Cost     =    $ 90,000

Total Cost                =      $ 95,000 -A

Profit = A * 15.3%    =       $ 14,535 -B

Price  = A+B           =        $ 109,535

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