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Use the Information Below to Answer the Following Questions The Demand for All Service Is Unlimited

question 36

Multiple Choice

Use the information below to answer the following questions.
Computers Expertise Ltd provides three services, the details for which are as follows: $\begin{array}{llll}& \underline{\text { Basic} }& \underline{ \text { Secretarial }} & \underline{ \text { Expert }}\\ \text { Sales price per unit } & \$ 20 & \$ 30 & \$ 50 \\\text { Variable cost per unit } & \$ 10 & \$ 12 & \$ 15 \\\text { (paper, transport, etc.) } & & & \\\text { Labour time per unit } & 1 \text { hour } & 2 \text { hours } & 5 \text { hours } \\\text { Annual fixed costs } & \$ 20,000 & &\end{array}$
The demand for all service is unlimited. The ability to provide the service is limited by the availability of qualified staff and therefore the labour time available.
-Refer to the table above. The demand for Secretarial Service is very strong, however, Computer Expertise does not have sufficient labour hours available to meet the demand. An employment agency is able to supply qualified staff to provide the Secretarial Service. What is the maximum price Computer Expertise should be prepared to pay per hour?

Definitions:

FOB Shipping Point

A term used in shipping agreements indicating that the buyer takes ownership and responsibility for goods once they are shipped, and is responsible for freight costs and risks.

Accounts Receivable

Outstanding balances due to a company from its clients for products or services rendered but still unpaid.

FOB Shipping Point

A shipping term indicating that the buyer assumes responsibility for the goods and the shipping costs from the point of departure.

Freight Costs

Expenses incurred by a company for transporting goods from one place to another.