Question

a dentist and wants to needs to Jessica is run her own office. She hire a recept. month & an for $2700 fol will be cost assistant 3500/month. ther rent $ 40,000 (year. minimum q per customer would be $65 How much she charge each customer if she wants to have $ 8000 /month she considering that pays $25000 year are aduetisement fees han have yoo customers eu what would the break - even be ) profil month

Answer 1

First we have to find total fixed charges Yearly recept 2700 X 12 32,400 Assistant = 3500 x 12 42,000 Rent 40.000 advertisement 25,000 fized Cost a 32400 + 42000 +40, OU O + 25,000 Toted 139400 She can 400 customers Per month. have have So it yearly Customers = 400X12 4800 Cost ber customer would be 65 Total cost 4800 astomer is 4800 x 65 = 312,000 + fixed cost Hence cost function = Variable Cost 312,000 + 139,400 451400 Let each Total Customer charge number of Revenue customer Total 4,800 4800 x 8000 1 month Profit yearly &000 X 12 96, ovo

Since Revenue - cost fonction Profit 48oon 451400 96.000 4800x = 96000 t 451400 480on こ 547400 n = 547400 4800 2737 24 2 = 114.04 For Break- even point Profit zo he Revenue Cost function 48oon 451400 n = 451400 4800 u = 94.04