Bright Future Investors is opening an office in Charlotte, North Carolina. Fixed monthly expenses are office rent ($2,200), depreciation on office furniture ($320), utilities ($260), special telephone lines ($680), a subscription to an online brokerage service ($710), and the salary of a financial planner ($4,830). Variable expenses include payments to the financial planner (12% of revenue), advertising (4% of revenue), supplies and postage (3% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Read the requirements. Requirement 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 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 $ 12,000 Bright Future Investors must make 24 trades to break even. Requirement 2. Compute dollar revenues needed to earn monthly operating income of $5,250. Begin by identifying the formula to compute the operating income. Sales revenue - Variable expenses - Fixed expenses = Operating income The dollar revenues needed to earn monthly operating income of $5,250 is $ . Bright Future Investors is openips an office in Charlotte North Carolina Cived monthly avnanAn AS offion cont 70200 danrasiation an affian firniture ($3 20), utilities ($260), special telephone lines le expenses include payments to the financial planne i Requirements elephone lines and computerized brokerage service Read the requirements. w many trades must it Requirement 1. Compute the il make to breakeven? First identify the formula to calc 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 in revenue for Bright Future, how many trades must it make to breakeven? 2. Compute dollar revenues needed to earn monthly operating income of $5,250. 3. Graph Bright Future's CVP relationships. Assume that an average trade leads to $500 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 $5,250 is earned. The graph should range from 0 to 40 units (trades). 4. Assume that the average revenue that Bright Future Investors earns decreases to $300 per trade. How does this affect the breakeven point in number of trades? ( Fixed expenses Bright Future Investors' breake Bright Future Investors must m Print Done Requirement 2. Compute dolla Begin by identifying the formula to compute the operating income
