Break-Even Sales: Sales for Target Profit Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 26,000 hours next year. Health-Temp charges the hospitals and clinics $110 per hour and has variable costs of $89.10 per hour (this includes the payment to the nurse). Total fixed costs equal $530,233. 3. Calculate the sales revenue needed to achieve a target profit of $129,580. 4. What if Health-Temp had target operating income (profit) of $158,840? Would sales revenue be larger or smaller than the one calculated in Requirement 3? By how much?
Break-Even Sales: Sales for Target Profit Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 26,000 hours next year. Health-Temp charges the hospitals and clinics $110 per hour and has variable costs of $89.10 per hour (this includes the payment to the nurse). Total fixed costs equal $530,233. 3. Calculate the sales revenue needed to achieve a target profit of $129,580. 4. What if Health-Temp had target operating income (profit) of $158,840? Would sales revenue be larger or smaller than the one calculated in Requirement 3? By how much?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 3CE: Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics...
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Break-Even Sales: Sales for Target Profit
Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 26,000 hours next year. Health-Temp charges the hospitals and clinics $110 per hour and has variable costs of $89.10 per hour (this includes the payment to the nurse). Total fixed costs equal $530,233.
3. Calculate the sales revenue needed to achieve a target profit of $129,580.
4. What if Health-Temp had target operating income (profit) of $158,840? Would sales revenue be larger or smaller than the one calculated in Requirement 3?
By how much?
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