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 an online brokerage service ($2,700), and the salary of a financial planner ($10,900). 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 2. Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $11,200. Begin by selecting the formula to compute the required sales in units to earn a target profit. = Target profit Rearrange the formula you determined above and compute the required number of trades to earn a monthly target profit of $11,200. Diversified must make trades to earn a monthly operating income of $11,200.
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 an online brokerage service ($2,700), and the salary of a financial planner ($10,900). 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 2. Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $11,200. Begin by selecting the formula to compute the required sales in units to earn a target profit. = Target profit Rearrange the formula you determined above and compute the required number of trades to earn a monthly target profit of $11,200. Diversified must make trades to earn a monthly operating income of $11,200.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text: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 an
online brokerage service ($2,700), and the salary of a financial planner ($10,900). 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 2. Use the equation approach to compute the dollar revenues needed to earn a monthly target profit
of $11,200.
Begin by selecting the formula to compute the required sales in units to earn a target profit.
=
Target profit
Rearrange the formula you determined above and compute the required number of trades to earn a monthly target
profit of $11,200.
Diversified must make
trades to earn a monthly operating income of $11,200.
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