Your client, SmartClean, Inc., is a cleaning service for office and industrial locations. SmartClean has been in business for 5 years and has shown steady revenue growth each year. The owner originally started the business using a business loan. The owner has $10,000 remaining on the loan after steadily making payments and has an excellent personal and business credit history.

The owner wishes to expand the SmartClean business into three new territories, needs an infusion of capital, and is looking for $50,000 to make the expansion.

The expected fixed costs for the current business and expansion are $75,000. SmartClean's average charge per job is $250.00. The variable cost per job is $35.00.

Conduct a breakeven analysis (based on the given price and costs) in this spreadsheet.

1)Complete the table below.

2)Calculate the BEQ.

3)Referring to the table you completed in part 1), what is the minimum quantity (in buckets of 50 jobs) you recommend to the owner to cover the remaining $10,000 loan?

 

Transcribed Image Text:

23 24 25 Quantity Total Revenue 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 0 50 100 150 200 250 300 350 400 450 500 550 600 650 Variable Fixed Total Costs Costs Costs Profit / (Loss) Variable Fixed Costs Costs $35 $75,000 Minimum Quantity Price $250 BEQ 23 24 25 Quantity Total Revenue 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 0 50 100 150 200 250 300 350 400 450 500 550 600 650 Variable Fixed Total Costs Costs Costs Profit / (Loss) Variable Fixed Costs Costs $35 $75,000 Minimum Quantity Price $250 BEQ

Answer rating: 100% (QA)

Question Quantity Total Revenue Variable Costs Fixed Costs Total Costs ProfitLoss 0 750... View the full answer