Reference no: EM132586096

New Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are

office rent ($8,700),

depreciation on office furniture ($1,700),

utilities ($2,000),

special telephone lines ($1,400),

connection with an online brokerage service ($2,500),

and the salary of a financial planner ($18,700).

Variable costs include payments to the financial planner (9% of revenue),

advertising (11% of revenue), supplies and postage (4% of revenue), and

usage fees for the telephone lines and computerized brokerage service (6% of revenue).

Question 1: Use the contribution margin ratio approach to compute New's breakeven revenue in dollars. If the average trade leads to $1,250 in revenue for New, how many trades must be made to break even?