How many trades must be made to break even
How many trades must be made to break even
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Financial Accounting
National investor group is opening an office in Portland. Fixed monthly costs
are office rent (8500, depreciation on office furniture ($2000), utilities
($2100), special telephone lines ($1100), connection with brokerage service
($2800), and the salary of a financial planner ($4500). Varible cost include
payments to financial planner (8% of revenue), advertising (13% of revenue),
supplies and postage 3% of revenue and usuage fees for telephone lines 6% of
revenue.
Use the Contribution margin ratio CVP formula to compute National breakeven in
dollars. If the average trade leads to $1000 in revenue for National how many
trades must be made to break even?