Requirement 3. If Sierra Design wants to earn profits equal to 20% of sales revenue, how much (what total fee) should the company charge each of these two clients? Identify the formula then determine the amount Sierra Design should charge these clients. (Round your answers to the nearest whole dollar.)

sales revenue = total costs/0.8 ; Client 1 Sales revenue = $177,550/- ; Sales revenue = $10,691/-

Explanation:

Assumptions:

As total job costs are not provided so they would be assumed(using similar question) as:

client 1 = T.C ; total job costs = $142,040.00

client 2 = G.G.Com ; total job costs = $8553.00

Given Data:

Profit = 20% of sales revenue

Solution:

As we know that

total cost = sales revenue - profit

total cost = sales revenue - 0.2*sales revenue  (given: profit=0.2sales revue)

By arrangiing this equation, we get

                    sales revenue = total costs/0.8

Now for Client 1(T.C)

Sales revenue = total costs/ 0.8

                        = 142040/0.8

Sales revenue = $177,550/-

Now for Client 2 (G.G.Com)

Sales revenue = total costs/ 0.8

                         = 8553/ 0.8

Sales revenue = $10,691/-

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