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adoni [48]
3 years ago
12

Break-Even for a Service Firm Jonah Graham owns and operates The Green Thumb Company (GTC), which provides live plants and flowe

r arrangements to professional offices. Jonah has fixed costs of $3,240 per month for office/greenhouse rent, advertising, and a delivery van. Variable costs for the plants, fertilizer, pots, and other supplies average $24 per job. GTC charges $60 per month for the average job. Required: 1. How many jobs must GTC average each month to break even
Business
1 answer:
kenny6666 [7]3 years ago
5 0

Answer:

The company should provide, in average, 90 jobs per month in order to break even.

Explanation:

We will assume that the variable costs are proportional to the quantity and thus VC=a*Q

the profit obtained is

profit = P*Q  , (Price [$/job] * Jobs sold [jobs])

and the total costs are

total costs= FC+VC = FC + a*Q , FC=fixed costs

in order to break even the quantity sold should be enough to cover all costs, therefore

profit = total costs

P*Q = FC + a*Q → Q= FC/(P-a)

thus

Q= FC/(P-a) = $3240 / ($60/job - $24/job) = 90 jobs

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Electronic Arts is a video game company that competes with Activision Blizzard. A condensed balance sheet for Electronic Arts an
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a. <em>Computation of percentages for Vertical Analysis</em>

Other current Assets  -- (Other current assets/Total Assets) * 100 -- ($291/$5070)*100 -- 6%

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Break Even Analysis 1. A USB thumb drive production line will have $240,000 fixed costs variable costs per unit of $1.97. Each u
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Answer:

Instructions are below.

Explanation:

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Break-even point in units= 240,000 / (4.97 - 1.97)

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Determine the monthly payment for a 36 month lease on a $26,000 car with a residual of 71% and an interest rate of 7. 5%. A. $10
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First calculate the residual value as:

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\begin{aligned}&= 0.71 \times  26,000\\\\&= \$ 18,460\end{aligned}

Calculate the money factor as:

\begin{aligned}\rm Money\; factor &= \dfrac{7.5 }{2400}\\\\&= 0.003125\end{aligned}

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\begin{aligned}\rm Monthly depreciation &= \dfrac{\text{Lease amount - residual amount }}{\text{Number of months}}\\\\&=\dfrac{ 26000 - 18460}{36}\\\\&= \$209.44\end{aligned}

  • <u>Step 2</u>: Calculate the monthly financial charge as:

\begin{aligned} \text{Monthly Financial Charge} &= (\text{Lease amount + Residual value}) \times  \text{Money factor}\\\\&= (26000 + 18460) \times 0.003125\\\\&= \$138.94 \end{aligned}

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\begin{aligned}\text{Monthly Lease Amount} &= \text{Monthly Depreciation + Financial Charge}\\\\&= 209.44 + 138.94\\\\&= \$348.38\end{aligned}

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