Diversified Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,800),depreciation on office furniture ($2,000), utilities ($2,100), special telephone lines ($1,500), a connection with anonline brokerage service ($2,700), and the salary of a financial planner ($10,900). Variable costs include payments tothe financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), andusage fees for the telephone lines and computerized brokerage service (6% of revenue).Read the requirements.Requirement 2. Use the equation approach to compute the dollar revenues needed to earn a monthly target profitof $11,200.Begin by selecting the formula to compute the required sales in units to earn a target profit.=Target profitRearrange the formula you determined above and compute the required number of trades to earn a monthly targetprofit of $11,200.Diversified must maketrades to earn a monthly operating income of $11,200.

The formula we need to compute the required revenue to reach a target profit is the contribution…

Answered: Diversified Investor Group is opening…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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American Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,800), depreciation on office furniture ($1,800), utilities ($2,500), special telephone lines ($1,500), a connection with an online brokerage service ($2,400), and the salary of a financial planner ($4,000). 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 American's breakeven revenue in dollars. If the average trade leads to $750 in revenue for American, 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 American to break even. (Abbreviation used: CM = contribution margin.) Fixed costs Target profit ) + CM ratio =…
National Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,10), utilities ($2,000), special telephone lines ($1,500), a connection with an online brokerage service ($2,500), and the salary of a finanical 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). REQUIREMENTS :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 manhy 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. :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…
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ChimneySweep provides cleaning services for residential chimneys and fireplaces. The cleaning service requires $35 in variable costs for cleaning materials. The fixed costs of labor, the company’s truck, and administrative support are $165,000 per year. ChimneySweep averages 100 service calls per month. What is the average cost per cleaning service call? Round your answer to 2 decimal places.
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Tim Urban, owner/manager of Urban's Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy's Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365 × 50 equals the total rooms rented for the year). Tim's cost to clean a room is $13.00. The Duffy's Maid Service quote is $19.00 per room plus a fixed cost of $26,000 for sundry items such as uniforms with the motel's name. Tim's annual fixed cost for space, equipment, and supplies is $61,000. Based on the given information related to costs for each of the options, the crossover point for Tim = room nights (round your response to the nearest whole number).
Q-Constructions has tasked you to investigate the number of construction projects per year for which the company would need to break-even and make a profit of $500,000 per year. The average price of a building contract is $700,000 per project. The following are the fixed and variable costs of Q-Constructions in Table 2: Description Cost Office Space 55,000 Professional Staff Salaries 205,000 Insurances 50,000 Machine Maintenance 80,000 Website Management 30,000 On-site workers’ salaries $120,000 per project Average Material Cost 60% of the project price per project Table 2: Associated Costs of Q-Constructions Use this information above to complete the requested analyses below. Calculate: The break-even number of projects needed by the company. The income made by the company at break-even. Calculate the new number of projects that need to be completed to maintain a profit of $500,000 per year.
Q-Constructions has tasked you to investigate the number of construction projects per year for which the company would need to break-even and make a profit of $500,000 per year. The average price of a building contract is $700,000 per project. The following are the fixed and variable costs of Q-Constructions in Table 2: Description Cost Office Space 55,000 Professional Staff Salaries 205,000 Insurances 50,000 Machine Maintenance 80,000 Website Management 30,000 On-site workers’ salaries $120,000 per project Average Material Cost 60% of the project price per project Table 2: Associated Costs of Q-Constructions Use this information above to complete the requested analyses below. Calculate: The break-even number of projects needed by the company. The income made by the company at break-even. Show all working out including the modelling and solution steps. Q-Constructions is interested in making a profit per year to ensure the…
Q-Constructions has tasked you to investigate the number of construction projects per year for which the company would need to break-even and make a profit of $500,000 per year. The average price of a building contract is $700,000 per project. The following are the fixed and variable costs of Q-Constructions in Table 2: Description Cost Office Space 55,000 Professional Staff Salaries 205,000 Insurances 50,000 Machine Maintenance 80,000 Website Management 30,000 On-site workers’ salaries $120,000 per project Average Material Cost 60% of the project price per project Table 2: Associated Costs of Q-Constructions Use this information above to complete the requested analyses below. Calculate: The break-even number of projects needed by the company. The income made by the company at break-even. Show all working out including the modelling and solution steps. Q-Constructions is interested in making a profit per year to ensure the…
Q-Constructions has tasked you to investigate the number of construction projects per year for which the company would need to break-even and make a profit of $500,000 per year. The average price of a building contract is $700,000 per project. The following are the fixed and variable costs of Q-Constructions in Table 2: Description Cost Office Space 55,000 Professional Staff Salaries 205,000 Insurances 50,000 Machine Maintenance 80,000 Website Management 30,000 On-site workers’ salaries $120,000 per project Average Material Cost 60% of the project price per project Table 2: Associated Costs of Q-Constructions Use this information above to complete the requested analyses below. A) Calculate: The break-even number of projects needed by the company. The income made by the company at break-even. Show all working out including the modelling and solution steps. B) Q-Constructions is interested in making a profit per year to ensure…
Q-Constructions has tasked you to investigate the number of construction projects per year for which the company would need to break-even and make a profit of $500,000 per year. The average price of a building contract is $700,000 per project. The following are the fixed and variable costs of Q-Constructions in Table 2: Description Cost Office Space 55,000 Professional Staff Salaries 205,000 Insurances 50,000 Machine Maintenance 80,000 Website Management 30,000 On-site workers’ salaries $120,000 per project Average Material Cost 60% of the project price per project Table 2: Associated Costs of Q-Constructions a. Q-Constructions workers’ have approached the building union and been informed they could be paid a higher salary and want their salaries to be determined based on a percentage of the project price. The company has reviewed their historical records on the number of projects per year and has made the decision to respect the…

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