While I appreciate your response, I do need more specific information. I spent a considerable amount of time with processing the submitted document and I need to know this information: Please provide the following information: (Formula) = __________ + ___________ / ______________= Required Sales in Dollars

Need number or dollar amounts: _____________ + ______________ / _______% =

America must make _________ trade to break even.

Rearrange the formula you determined above and compute the required number of trades to earn a monthly target profit of $12,600.

American needs ___________ in revenue to earn a monthly operating income of $12,000.

Suppose that the average revenue Americans earn increases to $2,000 per trade. Compute the new breakdown point in trades. How does this affect the affect the breakdown point?

Under new assumptions, Americans must make _______ trades to breakdown. With the increase in the average revenue the trade, the breakeven point in number of trades.

Check the graphs to plot the first point on your line

Fixed Cost Office Rent Depreication Utilities Special Tel lines Connection with online Salary Total Fixed $ $ $ $ $ $ $ 8,800 1,700 2,000 1,000 2,800 18,700 35,000 Variable cost Financial Planner Advertising Supplies and Postage Usage fees Total Variable cost 8% 13% 33% 6% 60% CM margin 40% 1 Break even revnues Trades to be made 87500 87.5 2 Profit = Sales - Variable cost -Fixed Cost 12600 = X -.6*x -35000 47600 = .4x x = 47600/.4 X = $119000 revenues for 12600 profit 3 Trades 25 50 75 100 119 140000 120000 100000 80000 60000 40000 20000 0 Revenues Total Cost 25000 50000 50000 65000 75000 80000 100000 95000 119000 106400 T 80000 60000 40000 20000 0 25 50 75 100 119 4 Break even point in $ Break even in trades 87500 43.75 For revenues in $ for break even point there is no change as the CM ratio is the same however the number of trades for break even has reduced by 50% due to increase in revenues per trade by 100%. USE CVP Analysis to perform sensitivity analysis American Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,800), depreciation on office furniture is($1,700), utilities ($2,000), special telephone lines ($1,000), a connection with an online brokerage service ($ 2,800) and the salary of a financial planner ($18,700). Variable costs include payments to the financial planner (8% of revenue), advertising (13% of revenue, supplies and postage (33% of revenue), supplies and postage (33% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Requirements 1. Use the contribution margin ratio approach to compute American's breakeven revenue in dollars. If the average trade leads to $1,000 in revenue for American, how many trades must be made to break even? Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $12,600. 3. Graph American's CVP relationships. Assume that an average trade leads to $1,000 in revenue for American. 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. 4. Suppose that the average revenue American earns increases to $2,000 per trade. Compute the new breakeven point in trades. How does this affect the breakeven point? (Round your answers to the nearest whole number.)