This problem continues the Daniels Consulting situation from Problem P19-44 of Chapter 19. Daniels Consulting provides consulting service at an average price of $120 per hour and incurs variable cost of $60 per hour. Assume average fixed costs are $3,900 a month.
In Problem

Requirements
1. What is the number of hours that must be billed to reach the breakeven point?
2. If Daniels desires to make a profit of $4,500, how many consulting hours must be completed?
3. Daniels thinks it can reduce fixed cost to $3,190 per month, but variable cost will increase to $62 per hour. What is the new breakeven point in hours?

Budgeted Cost of Activity Predetermined Overhead Allocation Rate Activity Designing Programming Testing Allocation Base $20,000 50,000 25,000 Number of designs Number of direct labor hours Number of tests $1,350 25 500