Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pet Energy Therapy Association (PETA) treats peoples' pets, and has the following cost structure: Charge per therapy session$95 Variable cost per therapy session$ 45 Fixed

Pet Energy Therapy Association (PETA) treats peoples' pets, and has the following cost structure:

Charge per therapy session$95

Variable cost per therapy session$ 45

Fixed costs$75,000

They expect to perform 2,000 two hour session each year (8/day, 5 days/week, 50 weeks/year).

A. Construct PETA's profit and loss statement. Profit/Loss $

B. How many sessions must PETA's perform to breakeven?Sessions.

C. To earn a profit of $80,000, how many sessions must they provide this year? Sessions.

D. If there is one fulltime employee, fully booked, who spends one hour on each session (8 sessions per day, 40 per week, 2,000/year), what would we need to assume about the additional sessions needed to earn $100,000?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Answer PETA Profit and Loss Statement PL A Profit and Loss Statement RevenueCostProfitLoss Therapy Sessions Units Sold PriceVariable Costs Units Sold ... 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

Accounting for Decision Making and Control

Authors: Jerold Zimmerman

8th edition

78025745, 978-0078025747

More Books

Students also viewed these Finance questions