Ford Legal Services (FLS) is considering adding a new line of simplified wills and estate plans to
Question:
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 | $ 1,290 |
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Variable cost per client | $ 840 |
Fixed costs per year associated with this product | $ 92,250 |
Income tax rate | 22% |
Required:
Compute Ford Legal Service's break-even point in clients per year for this new service.
How many clients must Ford Legal Services attract to earn $87,750 per year after taxes for this new service?
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.
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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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Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher