Reference no: EM132996370

An engineering consulting company charges for its services based on the academic level of the professional staff involved in each project. The average variable cost of all its personnel is $ 980 per hour of service and the average price at which it offers its services is $ 1220 per hour. The company's annual fixed expenses amount to $ 20,240,000 when it has the necessary elements to offer 160,000 hours of services per year.

Problem (a) What is the company's breakeven point expressed in hours of service and as a percentage of its total capacity?

Problem (b) What is the breakeven point if fixed costs are reduced by 10%?

Problem (c) What is the breakeven point if the variable costs per hour are reduced by 10%?

Problem (d) What is the breakeven point if fixed costs are reduced by 10% and variable costs per hour are reduced by 10%?

Problem (e) What is the breakeven point if the selling price is reduced by 10%?

Problem (f) What should be the price at which the service can be offered to maintain the original breakeven point if fixed costs increase 10% and variable costs increase 10%