Transcribed Image Text
Big TimeBig Time Investor Group is opening an office in?Portland, Oregon. Fixed monthly costs are office rent ?($$8,900?),depreciation on office furniture left parenthesis $($1,700)?,utilities ?($2,500?), special telephone lines ?($1,600?), aconnection with an online brokerage service ?($2,600?), and thesalary of a financial planner ?($17,700?). Variable costs includepayments to the financial planner ?(88?% of? revenue), advertisingleft parenthesis (13% of? revenue), supplies and postage ?(33?% of?revenue), and usage fees for the telephone lines and computerizedbrokerage service left parenthesis 6 %(6% of? revenue).1.Usethe contribution margin ratio approach to computeBig Time?'s breakeven revenue in dollars. If the average tradeleads to $1,000in revenue for Big Time?, how many trades must be made to break?even?2.Usethe equation approach to compute the dollar revenues needed to earna monthly target profit of $12,600.3.GraphBig Time?'s CVP relationships. Assume that an average tradeleads to $1,000in revenue for Big Time. Show the breakeven? point, the salesrevenue? line, the fixed cost? line, the total cost? line, theoperating loss? area, the operating income? area, and the sales inunits? (trades) and dollars when monthly operating income of$12,600 is earned.4.Suppose that the average revenueBig Time earns increases to $2,000 per trade. Compute the newbreakeven point in trades. How does this affect the breakeven?point??(Round your answers to the nearest whole? number.)