Carl and Janice Bowman have started their own business. Handy Maids, which offers cleaning services for households.

Question:

Carl and Janice Bowman have started their own business. Handy Maids, which offers cleaning services for households. The Bowmans have fixed expenses of $4,000 per month for office rent, advertising, and a receptionist. Variable expenses for the maids' wages, cleaning supplies, and paper supplies are $22 per job. Handy Maids charges $42 for the average job.

Required:

1. How many jobs must Handy Maids average each month to break even?

2. What is the operating income for Handy Maids in a month with 240 jobs? With 190 jobs?

3. Suppose that Handy Maids decides to increase the price to $45 per job. What is the new break-even point in number of jobs per month?

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