How many trades must be made to break even
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?
