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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Planning Specialists Investors is opening an office in Atlanta, Georgia. Fixed monthly expenses are office rent ($2,500), depreciation on office furniture ($260), utilities ($250), special telephone lines ($600), a subscription to an online brokerage service ($640), and the salary of a financial planner ($1,750). 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 (8% 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 Planning Specialists, how many trades must it make to breakeven? First identify the formula to calculate the breakeven point in dollars. (Contribution margin per unit ▼ + Requirements 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 in revenue for…
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Mortgage Investor Group opening an office in Portland, OregonFixed monthly costs are office rent ($8,900) , depreciation on office furniture (1, 800), utilities ($2,200), special telephone lines ($1,000), a connection with an online brokerage service ($2,700) , and the salary of a financial planner ($4,400). 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). Requirement 4. Suppose that the average revenue Mortgage earns increases to $1.500 per trade. The new breakeven point trades. How does the affect the break even point? Unber new assumptions, Mortage must make ____________ trades to breakeven

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