Mike Lowry runs a highly successful Internet cafe.He incurs costs of $10 000 per week for salaries,and expects his business to bill 5000 hours per month.He also pays rent of $30 000 per year,and incurs other fixed costs totalling $2000 per month.Mike desires a profit of $300 000 per year (not including taxes).
Required:
A.What is the minimum rate Mike must bill his clients per hour to avoid making a loss?
B.What must Mike bill his clients per hour in order to earn his target profit?

Question

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The Answer of Mike Lowry runs a highly successful Internet cafe.He incurs costs of $10 000 per week for salaries,and expects his business to bill 5000 hours per month.He also pays rent of $30 000 per year,and incurs other fixed costs totalling $2000 per month.Mike desires a profit of $300 000 per year (not including taxes).
Required:
A.What is the minimum rate Mike must bill his clients per hour to avoid making a loss?
B.What must Mike bill his clients per hour in order to earn his target profit?

Mike Lowry Runs a Highly Successful Internet Cafe