Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Your Financial Investors is opening an office in Philadelphia, Pennsylvania. Fixed monthly expenses are office rent ($2,600), depreciation on office furniture ($270), utilities ($290), special
Your Financial Investors is opening an office in Philadelphia, Pennsylvania. Fixed monthly expenses are office rent ($2,600), depreciation on office furniture ($270), utilities ($290), special telephone lines ($650), a subscription to an online brokerage service ($700), and the salary of a financial planner ($3,490). Variable expenses include payments to the financial planner (10% of revenue), advertising (5% of revenue), supplies and postage (2% of revenue), and usage fees for the telephone lines and computerized brokerage service (3% of revenue). Read the requirements. Requirement 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 in revenue for Your Financial, how many trades must it make to breakeven? First identify the formula to calculate the breakeven point in dollars. Breakeven sales * Requirements 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 in revenue for Your Financial, how many trades must it make to breakeven? 2. Compute dollar revenues needed to earn monthly operating income of $7,200. 3. Graph Your Financial's CVP relationships. Assume that an average trade leads to $500 in revenue for the firm. Show the breakeven point, sales revenue line, fixed expense line, total expense line, operating loss area, operating income area, and sales in units (trades) and dollars when monthly operating income of $7,200 is earned. The graph should range from 0 to 40 units (trades). 4. Assume that the average revenue that Your Financial Investors earns decreases to $400 per trade. How does this affect the breakeven point in number of trades
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started