Park & Morgan, a law firm, is considering opening a legal clinic for midde- and low income clients. The clinic would bill at a rate if $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.

1. Compute the break even point in billable hours
2. Compute the break even point in total billings.
3. Find the new break even point in total billings if fixed costs go up by $2340.
4. Using the original figures, compute the break even 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 $3600

Please explain your answers so I can better understand how to do these problem

 

Posted Date: 2/20/2014 2:04:59 AM | Location : United States

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