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 $2,958 per month for office/greenhouse rent, advertising, and a delivery van. Variable costs for the plants, fertilizer, pots, and other supplies average $25 per job. GTC charges $59 per month for the average job.

Required:

1. How many jobs must GTC average each month to break even? _______ jobs per month

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 93 jobs? _______

3. Jonah faces a tax rate equal to 25 percent. How many jobs must Jonah have per month to earn an after-tax income of $1,320? Round your answer to the nearest whole number of jobs. _______ jobs per month

4. Suppose that Jonahs fixed costs increase to $3,078 per month and he decides to increase the price to $77 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