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 line, the total cost line, the operation loss area the operating income area, and the sales in units (trades) andn dollars when monthly operating income of $12,600 is earned. : Suppose that the average revenue National earns increases to $1,500 per trade. Compute the new breakeven point in trades. how does this affect the breakeven point?
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 line, the total cost line, the operation loss area the operating income area, and the sales in units (trades) andn dollars when monthly operating income of $12,600 is earned.
: Suppose that the average revenue National earns increases to $1,500 per trade. Compute the new breakeven point in trades. how does this affect the breakeven point?
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