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What is the operating income

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Reference no: EM131613927

Break-Even for a Service Firm

Jonah Graham owns and operates The Green Thumb Company (GTC), which provides live plants and flower arrangements to professional offices. Jonah has fixed costs of $3,240 per month for office/greenhouse rent, advertising, and a delivery van. Variable costs for the plants, fertilizer, pots, and other supplies average $24 per job. GTC charges $60 per month for the average job.

Required:

1. How many jobs must GTC average each month to break even?

2. What is the operating income for GTC in a month with 88 jobs? Enter a net loss as a negative amount.

What is the operating income for GTC in a month with 95 jobs?

3. Jonah faces a tax rate equal to 25 percent. How many jobs must Jonah have per month to earn an after-tax income of $1,200? Round your answer to the nearest whole number of jobs.

4. Suppose that Jonah's fixed costs increase to $3,400 per month and he decides to increase the price to $75 per job. What is the new break-even point in number of jobs per month? Round your answer to the nearest whole number of jobs.

Reference no: EM131613927

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