Mike Lowry Runs a Highly Successful Internet Cafe

question 11

Essay

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?

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Definitions:

Tasks

Basic units of action or work aimed at achieving a particular goal or outcome.

Transferable

Characteristics, skills, or knowledge that can be applied in various contexts or settings beyond their original domain.

Reciprocal

Involving a mutual or two-way exchange or influence between two or more parties.

Experiential Tasks

activities designed to engage participants through direct experience and learning by doing.