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Exercise 3 (25 points) All amounts are in KD F F M Investments is opening an office in Kuwait City Fised monthly costs are depreciation
Exercise 3 (25 points) All amounts are in KD F F M Investments is opening an office in Kuwait City Fised monthly costs are depreciation on office furniture (1,700), utities 12,000), special telecommunication lines (1,000, a revenue), advertisin telephone lines and c office rent 8,100 h an online brokerage service (2,000), and the salary of a financial planner (9% of g (12% of revenue. suppies and postage (4% of revenue, and usage fees for the omputerized brokerage service (5% of revenue). Requirements 1 Compute the breakeven revenue in dinars. If the average trade leads to kd 700 in revenue FFMI, how many trades are needed to breakeven? [10 points 2. Compute the amount needed to earn a target monthly operating income of 9,800 (5 points) 8. Graph FFMI's CVP relationships Assume that an average trade leads KD 700 in revenue. Show the breakeven point, the sales revenue line, the fixed cost line, the total cost line, the operating loss area, the operating income are, and the sales in units (trades) and dinars when monthly operating income of KD 9,800 is earned. The graph should range from 0 to 80 units. (5 points) Suppose that the average revenue FFMI earns increases to KD 800 per trade. Compute the new breakeven point in trades, How does this affect the breakeven point? (Spoints) 4
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