The loan department of Grisswald National Bank is responsible for processing loan applications. The loan processing fee for clients is $300 per application. Joan Evergreen, the manager of the department, wants to perform some cost-volume-profit analysis and is looking at computing a break-even point and doing some target profit calculations.

Variable costs in the loan department are as follows: wages of employees processing the loans, $16.50 per hour (a loan application takes four hours to process), office supplies, $3.20 per loan application, and other variable costs, $7.30 per loan application.

The annual fixed costs of the loan department are as follows: equipment depreciation, $6,000, office rental, $15,000, other fixed costs, $18,000.

1. Compute the number of loan applications the loan department must process to break-even.
2. Compute the number of loan applications the loan department must process to earn a profit of $60,000.
3. Using the original figures, compute the number of loan applications the loan department must process to break-even, if the loan processing fee is decreased by $1.00, variable costs for office supplies are decreased by $.20 per application, and fixed costs for office rental is decreased by $2,000.
4. Compute the total Sales Revenue in dollars at the break-even point for Requirement 3.
5. Using the figures in Requirement 3, compute the number of loan applications the loan department must process to earn a target profit of $40,000.