CVP GraphStarlight Dancing specializes in dance lessons for senior citizens. The dance studio employs four danceinstructors. One instructor also fills the role of location manager and is paid a salary of $3,000 permonth. The other dancers are paid $1,500 per month. In addition, each dance instructor is given acommission of $4.50 per new client they bring in. Other monthly expenses are as follows:1752001100AdvertisingRentDepreciationSuppliesUtilities$200 per month FC$1,100 per month C$25 per month TC$0.30 per student25$175 per month plus $0.20 per student Teacher 3,000FC$0.3$0.2 $5}$51,500 × 3 = 4500FC = 9,000SuCurrently Starlight charges $10 per student.VC u = $54.50FC(1) Determine the variable cost per student and the total monthly fixed costs.(2) Compute break-even point in units and dollars.(3) Prepare a CVP graph. Assume a maximum of 2,000 students are provided with dance instruction.Use increments of 250 for units on the horizontal axis and increments of $2,000 for the vertical axis.STA(4) Determine the net income assuming 2,000 students are provided with dance instruction. S***

Break-even point: The point where a company does not earn any profit but also does not incur any…

Starlight Dancing specializes in dance lessons for senior citizens. The dance studio employs four dance instructors. One instructor also fills the role of location manager and is paid a salary of $3,000 per month. The other dancers are paid $1,500 per month. In addition, each dance instructor is given a commission of $4.50 per new client they bring in. Other monthly expenses are as follows: 175 Advertising Rent Depreciation Supplies Utilities month per FC $200 $1,100 per month C 200 $0.30 per student $25 per month C 1100 25 Teacher 3,000 $175 per month plus $0.20 per student FC $5 1,500 × 3 = 4500 FC = 9,000 Su $0.3 Currently Starlight charges $10 per student. VC v= $5. $0.2 4.50 FC (1) Determine the variable cost per student and the total monthly fixed costs. (2) Compute break-even point in units and dollars. (3) Prepare a CVP graph. Assume a maximum of 2,000 students are provided with dance instruction. Use increments of 250 for units on the horizontal axis and increments of $2,000 for the vertical axis. (4) Determine the net income assuming 2,000 students are provided with dance instruction. STA

Starlight Dancing specializes in dance lessons for senior citizens. The dance studio employs four dance instructors. One instructor also fills the role of location manager and is paid a salary of $3,000 per month. The other dancers are paid $1,500 per month. In addition, each dance instructor is given a commission of $4.50 per new client they bring in. Other monthly expenses are as follows: 175 Advertising Rent Depreciation Supplies Utilities month per FC $200 $1,100 per month C 200 $0.30 per student $25 per month C 1100 25 Teacher 3,000 $175 per month plus $0.20 per student FC $5 1,500 × 3 = 4500 FC = 9,000 Su $0.3 Currently Starlight charges $10 per student. VC v= $5. $0.2 4.50 FC (1) Determine the variable cost per student and the total monthly fixed costs. (2) Compute break-even point in units and dollars. (3) Prepare a CVP graph. Assume a maximum of 2,000 students are provided with dance instruction. Use increments of 250 for units on the horizontal axis and increments of $2,000 for the vertical axis. (4) Determine the net income assuming 2,000 students are provided with dance instruction. STA

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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