P2. Park & Morgan, a law firm, is considering opening a legal clinic for middle- and low-income clients. The clinic would bill at a rate of $18 per hour. It would employ law students as paraprofessional help and pay them S$9 per hour. Other variable costs are anticipated to be $5.40 per hour, and annual fixed costs are expected to total $27,000. REQUIRED 1. Compute the breakeven point in billable hours. 2. Compute the breakeven point in total billings. 3. BUSINESS APPLICATION costs should go up by $2,340. Find the new breakeven point in total billings if fixed

P2. Park & Morgan, a law firm, is considering opening a legal clinic for middle- and low-income clients. The clinic would bill at a rate of $18 per hour. It would employ law students as paraprofessional help and pay them S$9 per hour. Other variable costs are anticipated to be $5.40 per hour, and annual fixed costs are expected to total $27,000. REQUIRED 1. Compute the breakeven point in billable hours. 2. Compute the breakeven point in total billings. 3. BUSINESS APPLICATION costs should go up by $2,340. Find the new breakeven point in total billings if fixed

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 6P

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Principles of Accounting:

12th Edition

Belverd E. + 5 others

Publisher: Cengage Learning

ISBN: 9781133593102

Problem 2p chapter 21 is unasnwered. If you could please answer it. Thank you.

Breakeven Analysis
P2. Park & Morgan, a law firm, is considering opening a legal clinic for middle- and
low-income clients. The clinic would bill at a rate of $18 per hour. It would employ
law students as paraprofessional help and pay them $9 per hour. Other variable costs
are anticipated to be $5.40 per hour, and annual fixed costs are expected to total
$27,000.
REQUIRED
1. Compute the breakeven point in billable hours.
2. Compute the breakeven point in total billings.
3. BUSINESS APPLICATION Find the new breakeven point in total billings if fixed
costs should go up by $2,340.
4. BUSINESS APPLICATION Using the original figures, compute the breakeven point
in total billings if the billing rate decreases by $1 per hour, other variable costs
decrease by $0.40 per hour, and fixed costs go down by $3,600.

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