Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need to fill in the blanks Robert Hansen wants to open a computer repair business, Repairs will be charged by per hour basis. He has

Need to fill in the blanks

image text in transcribed
Robert Hansen wants to open a computer repair business, Repairs will be charged by per hour basis. He has made the following estimates for the first year of trading Fixed costs $64,000 per annum Variable costs $ 20 Per hour Total hours of repair services 2,600 hours per year Repair service / Selling Price $ 70 Per hour Total revenue $182,000 Do not use decimals, commas, spaces or dollar signs ( $) in your numerical answers. round the decimal numbers to nearest whole number. To be able to do the question you need to fill each box. REQUIRED: 1. Calculate the break-even point, in number of hours and dollars $ . for the business. 2. Calculate the margin of safety hours. hours. 3. Robert wants to earn a profit of $65,000. Calculate the number of hours of repair service that would need to be provided to earn this amount of profit, Round to the nearest hour. 4. Robert believes that business will be very successful as he is opening in an area that does not have a repair business. He estimates that after a year, he will need to employ a part time employee to assist him. This will increase fixed costs by $30,000 per year, variable cost is expected to decrease by $5 per hour/ unit. Calculate the no. of hours of repair service Robert would need to earn same profit under the new conditions, Round to the nearest hour. 5. Should Robert make this expansion. Write yes or no

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_2

Step: 3

blur-text-image_3

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

Integrated Accounting For Windows

Authors: Dale A. Klooster, Warren Allen

6th Edition

0324664850, 9780324664850

More Books

Students also viewed these Accounting questions

Question

2. In what way can we say that method affects the result we get?

Answered: 1 week ago