Bright Future Investors is opening an office in Charleston, South Carolina. Fixed monthly expenses are office rent $($$$2,600),$ depreciation on office furniture $($$$270),$ utilities $($$$290),$ special telephone lines $($$$650),$ a subscription to an online brokerage service $($$$700),$ and the salary of a financial planner $($$$4,490).$ Variable expenses include payments to the financial planner of revenue$),$ advertising $(5\%$ of revenue$),$ supplies and postage $(2\%$ of revenue$),$ and usage fees for the telephone lines and computerized brokerage service $(23\%$ of revenue$).$

Read the requirements.

Requirement $1.$ Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $$600$ in revenue for Bright Future, how many trades must it make to breakeven?

First identify the formula to calculate the breakeven point in dollars.

$($

Fixed expenses

Operating income

$+$

Contribution margin ratio

$=$

Breakeven sales

Bright Future Investors' breakeven revenue in dollars is

Requirements

Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $$600$ in revenue for Bright Future, how many trades must it make to breakeven?

Compute dollar revenues needed to earn monthly operating income of $$1,800.$

Graph Bright Future's CVP relationships. Assume that an average trade leads to $$600$ in revenue for the firm. Show the breakeven point, sales revenue line, fixed expense line, total expense line, operating loss area, operating income area, and sales in units $($trades$)$ and dollars when monthly operating income of $$1,800$ is earned. The graph should range from $0$ to $40$ units $($trades$).$

Assume that the average revenue that Bright Future Investors earns decreases to $$500$ per trade. How does this affect the breakeven point in number of trades?