Risky Investor Group is opening an office in Portland. Fixed monthly costs are office rent ($8,400), depreciation on office furniture ($1,900), utilities ($2100) , special telephone lines($1,500), a connection with an online brokerage service ($2600), and the salary of a financial planner ($11,500). Variable costs include payments to the financial planner (8% of revenue), advertising(13% of revenue), supplies and postage (3% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue).

1.Use the contribution margin CVP formula to compute Risky's breakeven revenue in dollars. If the average trade leads to $800 in revenue for Risky, how many trades must be made to break even? calculate the breakeven revenue in dollars first.

2. Use the income statement equation approach to compute dollar revenues needed to earn a target monthly operating income of $11200.

3. Suppose that the average revenue Risky earns increases to $2000 per trade. Compute the new breakeven point in trades. How does this affect the breakeven point?