Ford Legal Services (FLS) is considering adding a new line of simplified wills and estate plans to its current family law practice. This new service will target individuals who are currently not clients and whose legal needs are modest, but who prefer to have their wills and estate plans personally drafted. FLS estimates the follow prices and costs for the new service. Client fee Variable cost per client Fixed costs per year associated with this product Income tax rate Required: a. Compute Ford Legal Service's break-even point in clients per year for this new service. $1,240 $ 790 $ 69,750 22%
Ford Legal Services (FLS) is considering adding a new line of simplified wills and estate plans to its current family law practice. This new service will target individuals who are currently not clients and whose legal needs are modest, but who prefer to have their wills and estate plans personally drafted. FLS estimates the follow prices and costs for the new service. Client fee Variable cost per client Fixed costs per year associated with this product Income tax rate Required: a. Compute Ford Legal Service's break-even point in clients per year for this new service. $1,240 $ 790 $ 69,750 22%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ee.11.
Transcribed Image Text:Ford Legal Services (FLS) is considering adding a new line of simplified wills and estate plans to its current family law practice. This
new service will target individuals who are currently not clients and whose legal needs are modest, but who prefer to have their wills
and estate plans personally drafted. FLS estimates the follow prices and costs for the new service.
Client fee
Variable cost per client
Fixed costs per year associated with this product
Income tax rate
Required:
a. Compute Ford Legal Service's break-even point in clients per year for this new service.
b. How many clients must Ford Legal Services attract to earn $87,750 per year after taxes for this new service?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute Ford Legal Service's break-even point in clients per year for this new service.
Note: Round up your answers to the nearest whole number.
Break-even point
$ 1,240
$ 790
$ 69,750
22%
clients
a. Compute Ford Legal Service's break-even point in clients per year for this new service.
b. How many clients must Ford Legal Services attract to earn $87,750 per year after taxes for this new service?
Required A Required B
Complete this question by entering your answers in the tabs below.
Number of clients
How many clients must Ford Legal Services attract to earn $87,750 per year after taxes for this new service?
Note: Round up your answers to the nearest whole number.
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