Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Break-Even for a Service Firm Jonah Graham owns and operates The Green Thumb Company (GTC), which provides live plants and flower arrangements to professional offices.

Break-Even for a Service Firm Jonah Graham owns and operates The Green Thumb Company (GTC), which provides live plants and flower arrangements to professional offices. Jonah has fixed costs of $3,115 per month for office/greenhouse rent, advertising, and a delivery van. Variable costs for the plants, fertilizer, pots, and other supplies average $22 per job. GTC charges $57 per month for the average job.

Required: 1. How many jobs must GTC average each month to break even?

2. What is the operating income for GTC in a month with 85 jobs? Enter a net loss as a negative amount.

What is the operating income for GTC in a month with 96 jobs?

3. Jonah faces a tax rate equal to 20 percent. How many jobs must Jonah have per month to earn an after-tax income of $1,080? Round your answer to the nearest whole number of jobs. jobs per month

4. Suppose that Jonahs fixed costs increase to $3,273 per month and he decides to increase the price to $70 per job. What is the new break-even point in number of jobs per month? Round your answer to the nearest whole number of jobs. jobs per month

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Modern Approach

Authors: Sanjay Basotia

1st Edition

938092903X, 978-9380929033

More Books

Students also viewed these Accounting questions