Personal For You Investors is opening an office in Ann Arbor, Michigan. Fixed monthly expenses are...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Personal For You Investors is opening an office in Ann Arbor, Michigan. Fixed monthly expenses are office rent ($2,200), depreciation on office furniture ($320), utilities ($260), special telephone lines ($680), a subscription to an online brokerage service ($710), and the salary of a financial planner ($1,830). Variable expenses include payments to the financial planner (12% of revenue), advertising (4% of revenue), supplies and postage (3% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Read the requirements. Requirement 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 in revenue for Personal For You, how many trades must it make to breakeven? First identify the formula to calculate the breakeven point in dollars. ( Fixed expenses + Operating income )/ Contribution margin ratio = Personal For You Investors' breakeven revenue in dollars is $ Personal For You Investors must make 8,000 trades to break even. Bre ven sales 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 in revenue for Personal For You, how many trades must it make to breakeven? 2. Compute dollar revenues needed to earn monthly operating income of $5,250. 3. Graph Personal For You's CVP relationships. Assume that an average trade leads to $500 in revenue for the firm. Show the breakeven point, sales revenue line, fixed expense line, total expense line, operating loss area, operating income area, and sales in units (trades) and dollars when monthly operating income of $5,250 is earned. The graph should range from 0 to 40 units (trades). 4. Assume that the average revenue that Personal For You Investors earns decreases to $400 per trade. How does this affect the breakeven point in number of trades? Personal For You Investors is opening an office in Ann Arbor, Michigan. Fixed monthly expenses are office rent ($2,200), depreciation on office furniture ($320), utilities ($260), special telephone lines ($680), a subscription to an online brokerage service ($710), and the salary of a financial planner ($1,830). Variable expenses include payments to the financial planner (12% of revenue), advertising (4% of revenue), supplies and postage (3% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Read the requirements. Requirement 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 in revenue for Personal For You, how many trades must it make to breakeven? First identify the formula to calculate the breakeven point in dollars. ( Fixed expenses + Operating income )/ Contribution margin ratio = Personal For You Investors' breakeven revenue in dollars is $ Personal For You Investors must make 8,000 trades to break even. Bre ven sales 1. Compute the investment firm's breakeven revenue in dollars. If the average trade leads to $500 in revenue for Personal For You, how many trades must it make to breakeven? 2. Compute dollar revenues needed to earn monthly operating income of $5,250. 3. Graph Personal For You's CVP relationships. Assume that an average trade leads to $500 in revenue for the firm. Show the breakeven point, sales revenue line, fixed expense line, total expense line, operating loss area, operating income area, and sales in units (trades) and dollars when monthly operating income of $5,250 is earned. The graph should range from 0 to 40 units (trades). 4. Assume that the average revenue that Personal For You Investors earns decreases to $400 per trade. How does this affect the breakeven point in number of trades?
Expert Answer:
Answer rating: 100% (QA)
1 Formula for breakeven point in dollars is Fixed expenses Operating income Contribution margin rati... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0176223311
1st Canadian Edition
Authors: Karen Wilken Braun, Wendy Tietz, Walter Harrison, Rhonda Pyp
Posted Date:
Students also viewed these accounting questions
-
You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available about the company s operations: The cash balance...
-
Personal Investors is opening an office in Whitehorse. Fixed monthly expenses are office rent ($2,500), depreciation on office furniture ($260), utilities ($280), special tele- phone lines ($600), a...
-
Personal Investors is opening an office in Ville Marie. Fixed monthly costs are office rent ($2,800), depreciation on office furniture ($310), utilities ($260), special telephone lines ($670), a...
-
According to the American Red Cross, 11.6% of all Connecticut residents have Type B blood. A random sample of 28 Connecticut residents is taken. X = the number of Connecticut residents that have Type...
-
Determine whether the graph can represent a normal curve. If it cannot, explain why. 1. 2. 3. 4. 5. 6.
-
On January 1, 2008, Tony and Jon formed T&J Personal Financial Planning with capital investments of $480,000 and $340,000, respectively. The partners wanted to draft a profit and loss agreement that...
-
Pick out the correct relation between the \(\mathrm{COP}\) of a refrigerator \(\left(\mathrm{COP}_{\mathrm{R}} ight)\) and that of the heat pump \(\left(\mathrm{COP}_{\mathrm{HP}} ight)\) (a)...
-
The Arthur Tire Company manufactures racing tires for bicycles. Arthur sells tires for $ 55 each. Arthur is planning for the next year by developing a master budget by quarters. Arthurs balance sheet...
-
Find the y-intercepts of the graph of the equation x - 2x + y+ y = 30
-
MY Autobody's adjusted trial balance on December 31, 2023, appears in the work sheet as follows: No 101 Cash Shop supplies Account 124 128 Prepaid insurance 167 Equipment 168 Accumulated...
-
Xing has been asked to analyze potentially improper payments. She has searched all the disbursements for the relevant period and found three employees who have the same address. All of the payments...
-
I need help I have this code that I can get to print out however, I need it to print out in reverse here is my code def readFile(filename): dict = {} with open(filename, 'r') as infile: lines =...
-
I am having the same issue with this LAB: Number pattern Here is my code: def print_num_pattern(num1,num2): if (num1 == 0 or num1 < 0): print(num1, end = ' ') return print(num1, end = ' ')...
-
Take this file as input: state_population.csv ( I cant upload the file so I took a picture of the numbers) Use the population field as the datapoint to select your sample. Set the margin of error...
-
Hi, I am working on creating rank columns in my data but don't know how. I tried but did it incorrectly and now have to fix it. I have to: # - Rank on the basis of salt concentration # - Rank on the...
-
Find the function y = y(x) (for x > 0 ) which satisfies the separable differential equation dy x > 0 with the initial condition y(1) = 6. dx y = 00 5 + 17x xy (15 ln(x) + 51x + 165)
-
Insert six terms between 7 and 42 to form an AP:
-
A police officer pulls you over and asks to search your vehicle because he suspects you have illegal drugs inside your car. Since he doesn't have reasonable suspicion to search your car, legally he...
-
Complete the following statements with one of the terms listed here. You may use a term more than once, and some terms may not be used at all. a. ________________ is a language that utilizes a...
-
Grandmas Touch Specialty Foods produces a specialty chocolate chip cookie that is sold to hotel chains by the case for $50 per case. For the upcoming quarter, Grandmas Touch is projecting the...
-
The sales budget is the most important budget. Do you agree or disagree? Explain your answer.
-
As a check on the quality of eye glasses purchased over the internet, glasses were individually ordered from several different online vendors. Among the 92 lenses with antireflection coating, 61...
-
With reference to Exercise 10.55, find a large sample 95% confidence interval for the true difference of probabilities. Data From Exercise 10.55 10.55 As a check on the quality of eye glasses...
-
Two bonding agents, \(A\) and \(B\), are available for making a laminated beam. Of 50 beams made with Agent \(A, 11\) failed a stress test, whereas 19 of the 50 beams made with Agent \(B\) failed. At...
Study smarter with the SolutionInn App