Question: Jonah Graham owns and operates The Green Thumb Company GTC

Jonah Graham owns and operates The Green Thumb Company (GTC), which provides live plants and flower arrangements to professional offices. Jonah has fixed costs of $3,240 per month for office/greenhouse rent, advertising, and a delivery van. Variable costs for the plants, fertilizer, pots, and other supplies average $24 per job. GTC charges $60 per month for the average job.
Required:
1. How many jobs must GTC average each month to break even?
2. What is the operating income for GTC in a month with 88 jobs? With 95 jobs?
3. Jonah faces a tax rate equal to 25 percent. How many jobs must Jonah have per month to earn an after-tax income of $1,200?
4. Suppose that Jonah’s fixed costs increase to $3,400 per month and he decides to increase the price to $75 per job. What is the new break-even point in number of jobs per month?


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  • CreatedSeptember 01, 2015
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