SHARE is trying to determine how many clients must be serviced in order to cover

Question

SHARE is trying to determine how many clients must be serviced in order to cover its monthly service overhead. Using the high-low method, it has determined that the variable cost per client is $800 and that the monthly fixed overhead is $28,000.

Assuming an average fee of $1,400 per client and a targeted profit of $26,000, the number of clients to be serviced is a. 120 clients. b. 80 clients. c. 90 clients. d. 47 clients.



***PLEASE EXPLAIN*** SHARE is trying to determine how many clients must be serviced in order to cover its monthly service overhead. Using the high-low method, it has determined that the variable cost per client is $800 and that the monthly fixed overhead is $28,000.

Assuming an average fee of $1,400 per client and a targeted profit of $26,000, the number of clients to be serviced is a. 120 clients. b. 80 clients. c. 90 clients. d. 47 clients.



***PLEASE EXPLAIN***

Explanation / Answer

28,000+26000+800x=1,400x x=54000/600 =90

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