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Draper Consulting provides consulting services at an average price of $175 per hour and incurs variable costs of $100 per hour. Assume average fixed costs

Draper Consulting provides consulting services at an average price of $175 per hour and incurs variable costs of $100 per hour. Assume average fixed costs are $5,250 a month in 2020. Based on the given information, complete the following calculations.

a. What is the number of hours that must be billed each month to break even?

b. If Draper decides to make a profit of $3,000 a month, how many hours must be billed?

c. Draper thinks it can reduce its fixed costs to $3,990 per month, but will have to raise variable costs to $105 per hour. What is the number of hours that must be billed each month to break even under these circumstances?

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a. Break Even Under Normal Circumstances (Fixed Costs + Target Income ) Contribution Margin Break Even Point + 0 b. To Earn a Profit of $3,000 (Fixed Costs + Target Income ) Contribution Margin Break Even Point + II C. Break Even When Fixed Costs are $3,990 and Variable Costs are $105 (Fixed Costs Target Income ) Contribution Margin + = Break Even Point + 0

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