Question: Please help correct question 3 for me. James House is planning on starting a cleaning services business but has not decided whether he should focus

Please help correct question 3 for me.Please help correct question 3 for me. James House is planning on

James House is planning on starting a cleaning services business but has not decided whether he should focus on residential clients or commercial clients. His estimates of revenue, variable expenses, and fixed expenses are shown below. Revenue Variable expense Fixed expense Residential $ 25 per hour $ 15 per hour $ 500 per month Commercial $ 35 per hour $ 20 per hour $ 825 per month Required: 1. At what volume of hours per month will James be indifferent between focusing on residential versus commercial clients? Number of hours 65 2. Calculate the number of break-even hours for residential clients and commercial clients. 50 hours Break-even hours for residential clients Break-even hours for commercial clients 55 hours 3. Assume that James decides to focus on commercial clients and his business is operating at 120 hours per month. Calculate the margin of safety both in dollars and as a percentage of sales. (Round percentage answer to 1 decimal place.) Margin of safety (in dollars) Margin of safety as a percentage of sales $ 2,281 X 54.3 %

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!