TMP Human Resource Consulting had the following contribution margin income statement for the year ended 2016:

Employment services fees (1500 employed) Variable expenses	$	36000000 14400000
contribution margin Fixed expenses		21600000 12240000
Profit	$	9360000

Required

Answer each of the following independent situations:

A. Explain how an understanding of CVP analysis would improve the performance of the manager of a human resource consulting firm like TMP Human Resources Consulting.

B. As a graduate of a human resource management course you have finally become the manager of TMP Human Resource Consulting. In setting your salary at $500000, you need to calculate what the service fees need to increase by to maintain the company’s profit equal to at least 25% of total service fees.

C. You employ a friend who graduated with a degree in marketing and she believes that by increasing variable expenses by $1 200 per client and fixed advertising expenses by $300000 the firm will increase the number of clients by 100 per year. Would your marketing friend’s suggestions improve profitability? Explain why or why not.