Leota Mohrman owns and operates The Hassle-Free Hothouse (THH), which provides live plants…

1. Leota Mohrman owns and operates The Hassle-Free Hothouse (THH), which provides live plants and flower arrangements to professional offices. Leota has fixed costs of $2,380 per month for office/greenhouse rent, advertising, and a delivery van. Variable costs for the plants, fertilizer, pots, and other supplies average $25 per job. THH charges $60 per month for the average job.
Required:
1. How many jobs must THH average each month to break even?
2. What is the operating income for THH in a month with 65 jobs? With 100 jobs?
3. Suppose that THH decides to increase the price to $75 per job. What is the new break-even point in number of jobs per month?
2. Star Sports, Inc., represents professional athletes and movie and television stars. The agency had revenue of $10,780,000 last year, with total variable costs of $5,066,600 and fixed costs of $2,194,200.
Required:
1. What is the contribution margin ratio for Star Sports based on last year’s data? What is the break-even point in sales revenue?
2. What was the margin of safety for Star Sports last year?
3. What was the operating leverage for Star Sports last year?
3. Head-Gear Company produces helmets for bicycle racing. Currently, Head-Gear charges a price of $30 per helmet. Variable costs are $20.40 per helmet, and fixed costs are $38,680. The tax rate is 25 percent. Last year, 13,400 helmets were sold.
Required:
1. What is Head-Gear’s net income for last year?
2. What is Head-Gear’s break-even revenue?
3. Suppose Head-Gear wants to earn before-tax operating income of $153,320. How many units must be sold?
4. Suppose Head-Gear wants to earn after-tax net income of $150,000. How many units must be sold? (Round to the nearest unit.)