Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Homework: Week Five: Chapter 4 (managerial) Homework Problem Save Score: 0.5 of 3 pts 4 of 5 (4 complete) HW Score: 60.47%, 9.07 of 15

image text in transcribed
image text in transcribed
Homework: Week Five: Chapter 4 (managerial) Homework Problem Save Score: 0.5 of 3 pts 4 of 5 (4 complete) HW Score: 60.47%, 9.07 of 15 pts x PM4-57A (similar to) Question Help New Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,400), depreciation on office furniture ($1,700), utilities ($2,000), special telephone lines ($1,500), a connection with an online brokerage service ($2,800), and the salary of a financial planner ($11,600). Variable costs include payments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Read the requirements. Requirement 1. Use the contribution margin ratio approach to compute New's breakeven revenue in dollars. If the average trade leads to $800 in revenue for New, how many trades must be made to break even? Begin by showing the formula and then entering the amounts to calculate the required sales dollars for New to break even (Abbreviation used: CM = contribution margin.) ( Fixed costs + Target profit ) - CM ratio = Required sales in dollars % = Requirements - X Use the contribution margin ratio approach to compute New's breakeven revenue in dollars. If the average trade leads to $800 in revenue for New, how many trades must be made to break even? Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $11,200. Graph New's CVP relationships. Assume that an average trade leads to $800 in revenue for New. Show the breakeven point, the sales revenue line, the fixed cost line, the total cost line, the operating loss area, the operating income area, and the sales in units (trades) and dollars when monthly operating income of $11,200 is earned. Suppose that the average revenue New earns increases to $2,000 per trade. Compute the new breakeven point in trades. How does this affect the breakeven point? (Round your answers to the nearest whole number) Enter any number in the edit fields and then click Check Answer. Print Done 11 parts Check Answer remaining Type here to search 99. O S 10:03 PM 11/5/2020 738 home PO up 4- 10 144 "brt sc delete end backspace M A % OX 00 0 O lock W O X.U home enter

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Tools for Business Decision Making

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

9th edition

1-119-49356-3, 1119493633, 1119493560, 978-1119493631

More Books

Students also viewed these Accounting questions