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Calculate the number of lessons that are required to be sold

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Reference no: EM132648432

Ryans Music provides individual music lessons in the homes of clients. The following data are provided with the respect to the last 12 months of activity ending 30 June 2015.

Lesson selling price $45
Lesson labor cost 30
Annual fixed costs 18,000
Lesson sheet music costs 3

Required:

Question A. Assuming selling prices and costs remain the same as for 2015 calculate the number of lessons that are required to be sold in 2016 to break even.

Question b. Draw a graph to show the cost-volume-profit relationships for Ryans Music.

Question c. If 4000 music lessons were conducted in 2016, what profit would be achieved ?

Question D. For 2016, Ryans expects the lesson price. With some careful management , Ryans hopes to reduce annual fixed costs to $15000. Calculate the number of music lessons that would need to be performed in order to watch the profit calculated in (c) above.

Reference no: EM132648432

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