As Roya expands her business, she is thinking about incorporating and is wondering if you...
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Accounting
As Roya expands her business, she is thinking about incorporating and is wondering if you can provide any insight on the pros and cons of incorporation. Under an incorporated set-up, Roya would collect a monthly salary of $2,000 from the company to start. If she scales back her other job, Roya would bump the monthly salary up to $3,000. Roya has heard of cost-volume-profit (CVP) analysis and is wondering if the $3,000 monthly salary is treated as a fixed expense and other expenses are listed in the table below, how many annual tutoring hours (and total revenues) would she need to break-even? What would be her margin of safety? What does her CVP graph look like? Projected costs for 2024: Roya is wondering how the above costs would be recorded in a proper accounting system- she feels everything in the table is a variable cost but is not sure. Another concern is that she uses the car for
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