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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%
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