American Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,800), depreciation on office furniture ($1,800), utilities($2,500), special telephone lines ($1,500), a connection with an online brokerage service ($2,400), and the salary of a financial planner ($4,000). Variable costs includepayments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines andcomputerized brokerage service (6% of revenue).Read the requirements.Requirement 1. Use the contribution margin ratio approach to compute American's breakeven revenue in dollars. If the average trade leads to $750 in revenue forAmerican, how many trades must be made to break even?Begin by showing the formula and then entering the amounts to calculate the required sales dollars for American to break even. (Abbreviation used: CM = contributionmargin.)Fixed costsTarget profit ) +CM ratio= Required sales in dollars) +

Answer: Break even in sales dollars $ 30,000.00

In Pôrtland, Oregon. Fixed monthly costs are office rent ($8, 2,500), special telephone lines ($1,500), a connection with an online brokerage service ($2,400), and the yments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4 mputerized brokerage service (6% of revenue).

In Pôrtland, Oregon. Fixed monthly costs are office rent ($8, 2,500), special telephone lines ($1,500), a connection with an online brokerage service ($2,400), and the yments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4 mputerized brokerage service (6% of revenue).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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