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Please answer with step-by-step guides so I can give a good rating and learn this! Here are the answer choices! 7. National Investor Group is
Please answer with step-by-step guides so I can give a good rating and learn this!
Here are the answer choices!
7. National Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,100), depreciation on office furniture ($1,700), utilities ($2,000), special telephone lines ($1,500), a connection with an online brokerage service ($2,500), and the salary of a financial planner ($5,200). 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 National's breakeven revenue in dollars. If the average trade leads to $1,000 in revenue for National, 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 National to break even. (Abbreviation used: CM contribution margin.) Required sales in dollars - National must make trades to break even Requirement 2. Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $12,600 Begin by selecting the formula to compute the required sales in units to earn a target profit. Target profit Rearrange the formula you determined above and compute the required number of trades to earn a monthly target profit of $12,600 National must make trades to earn a monthly operating income of $12,600 Now compute the dollar revenues needed to earn a monthly target profit of $12,600 National needs $ in revenues to earn a monthly operating income of $12,600 (After you hit continue the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 3. Graph National's CVP relationships. Assume that an average trade leads to $1,000 in revenue for National. 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 $12,600 is earned We will begin graphing the CVP relationships by first plotting the two points breakeven point and the point where monthly operating income of $12,600 is earned. (Enlarge the graph to medium size and use the point tool button displayed below to draw the graph. Be sure to select a label for each point plotted.)Step by Step Solution
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